Published: August 3, 2021
NEW YORK – When billionaire collector Michael H. Steinhardt sued the Manhattan gallery Hirschl & Adler and its president, Stuart Feld, last fall, the contention was the “net to you” contract between the two parties. Steinhardt alleged fraud, breach of fiduciary duty and unjust enrichment.
Hischl & Adler facilitated the sale of Steinhardt’s nearly 9-foot-tall portrait painting of George Washington by Gilbert Stuart, known as the “Munro-Lenox” painting, in a $12 million transaction. The contract between the gallery and Steinhardt guaranteed the seller $10 million, written as “net to you.”
When the gallery sold the painting for $12 million and pocketed the amount over the net guaranteed to the seller, in this case a $2 million difference, the billionaire collector became litigious.
The case was puzzlingly scant, as Steinhardt’s lawyers did not argue that he misunderstood the contract or the term “net to you,” nor did they argue that the gallery broke the contract.
Steinhardt paid $5 million for the work in 2006 when it was sold by the New York Public Library.
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