How an Art Deal Between Griffin, Perelman and Gagosian Went Wrong

In the summer of 2020, one billionaire visited the Hamptons home of another to take a look at his collection of fine art—not an unusual occurrence in a seaside hotspot that attracts so many affluent New Yorkers. Ken Griffin, accompanied by mega art dealer Larry Gagosian, headed over to Ron Perelman’s 57-acre estate on an August afternoon to view two paintings for sale.

While Griffin, founder of hedge fund Citadel, left without Cy Twombly’s painting Untitled (1971), he did buy Brice Marden’s Letter About Rock in a deal brokered by Gagosian Gallery and later purchased another Marden painting, River 4. And what should have been a simple acquisition for Griffin has since turned into a months-long legal battle over a 2018 fire at Perelman’s Hampton home. 

The backstory involves art with no ‘oomph’

Shortly after Griffin’s visit, Perelman claimed that the artwork held at the property had been damaged in a fire that took place two years earlier. Holding companies for Perelman filed a lawsuit against a group of insurers, alleging that they were refusing to pay out $410 million worth of damages caused to five paintings.

In addition to the aforementioned Twombly, two Andy Warhols and two Ed Ruscha works were affected by exposure to heat, smoke and moisture, according to the complaint filed in New York State Supreme Court. “All of the pictures lost their luster, lost their depth, lost some of their definition and lost a lot of their character,” said Perelman in court filings. The Twombly, valued at $125 million, “lost its oomph,” he said. “It just didn’t have its spark.” 

How exactly is Ken Griffin involved?

The insurers denied the billionaire investor’s claims, arguing that the paintings were protected by plexiglass encasements and sustained no visible damage. Now they’re looking toward Griffin to bolster their case. In April, they filed a petition in a Florida court to enforce a deposition from Griffin, who they believe can provide valuable information on the state of Perelman’s artwork by disclosing his observations from and the discussions held during his August visit.

When he purchased the Marden paintings, Griffin was allegedly unaware that they had endured a fire, having first learned about the event from media reports last year. The two works were subsequently inspected and found to have been undamaged. 

Despite handing over hundreds of documents containing purchase agreements, photos and emails, the hedge fund manager has so far refused to testify. A deposition would be “burdensome” and “unnecessary,” according to his attorneys, who at one point said that making Griffin unavailable from his hedge fund for “even a few hours was not tolerable,” as alleged in court filings. They also pointed out that Gagosian, despite being involved in the two Marden sales, hasn’t been brought in to testify either.

“Ken is not a party to the litigation between Mr. Perelman and his insurance companies. He has never owned any of the art involved in their dispute,” said Zia Ahmed, a spokesperson for Griffin, in a statement to Observer. The insurers have also turned down an offer from Griffin to answer their questions in writing, he said. “Both parties have access to witnesses with far more substantive knowledge of any pertinent facts than Ken, and he is rightfully annoyed at the petty and harassing behavior of the insurers and their lawyers.”