Investor Steinhardt loses case over George Washington portrait sale

Please try another search

Economy9 hours ago (Jul 27, 2021 12:50PM ET)

By Herbert Lash

NEW YORK (Reuters) – Michael Steinhardt, a former hedge fund titan on Wall Street, lost a lawsuit he filed against an art gallery and its president for allegedly making an “unfair secret profit” from the $12 million sale on consignment of a portrait of George Washington.

Justice Joel Cohen of New York Supreme Court on Monday dismissed the case that was brought against Manhattan-based Hirschl & Adler Galleries and its president, Stuart Feld, for breach of fiduciary duties.

Steinhardt is a sophisticated investor who did not deny that he understood terms of the consignment said it would sell for $10 million “net to you,” Cohen said. Nor did he claim the gallery breached the consignment contract, he said.

“The meaning – and enforceability – of the phrase ‘net to you’ is the crux of the dispute,” Cohen wrote in his order to dismiss.

Steinhardt claimed the gallery failed to disclose the market value of the portrait of the first U.S. president painted circa 1800 by Gilbert Charles Stuart and misled him to believe it would be difficult to sell, according to the order.

Steinhardt, who bought the portrait in 2006 for $5 million, alleged he did not know the financial consequences of “net to you” in this transaction because he was not told what the ultimate sales price would be, the order said.

If Steinhardt, who also claimed the gallery engaged in fraud, unjust enrichment and deceptive business practices, wished to condition the “net to you” arrangement, he could have negotiated that, but did not, Cohen said.

Steinhardt, a trader, ran a hedge fund that averaged annualized returns of about 25% for almost three decades before he closed the fund in 1995.

Calls to Steinhardt and Hirschl & Adler seeking comment were not immediately returned.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.