A New York judge ruled Ron Perelman was not entitled to $400 million from insurers over alleged damage to an Andy Warhol and four other paintings from a 2018 fire at his Hamptons home.
Justice Joel M. Cohen’s Friday decision dismissing all of Perelman’s claims against affiliates of Lloyd’s of London Ltd., Chubb Ltd., and American International Group Inc. ends a five-year legal battle that pulled back the curtain on the typically opaque world of art insurance.
The insurers challenged Perelman’s claims of damage and suggested the 82-year-old former Revlon Inc. chairman was attempting a “money grab” due to financial difficulties. Cohen agreed with the insurers that the paintings were unharmed.
“Ultimately I was not persuaded that these paintings suffered physical damage in this fire,” the judge said as he ruled from the bench in his Manhattan courtroom.
During the three-week non-jury trial in June, Perelman seemed to acknowledge that the damage to the paintings, which also included works by Edward Ruscha and Cy Twombly, was in the eye of the beholder.
“They were not as vibrant — the contrast was not as deep,” Perelman testified. “They just did not have the same impact as they had before, to my eye.”
Lawyers for the insurers pointed out that Perelman only made claims on the five paintings two years after the fire, after already receiving more than $100 million in payouts for dozens of other artworks damaged in the blaze. They claimed he only decided to file claims when his financial situation took a turn for the worse.
During closing arguments before Cohen on Friday, Charles A. Michael, a lawyer for the insurers, said Perelman “had 300 million reasons to make up a claim” about damage to the five paintings. Michael also mocked Perelman’s “fantastical testimony about diminished oomph and all the rest.”
The five paintings were insured for many times their market value, so they could be replaced by art of a similar quality even in the face of expected appreciation. For instance, the version of Warhol’s Campbell’s Soup Can owned by Perelman was insured for $100 million, even though it was appraised at $12.5 million in 2018, according to court filings.
Perelman’s lawyers insisted throughout the trial that the paintings were legitimately damaged in the fire, pointing out that they were hung on the same floor as other artworks which insurers covered. The insurers countered that two other paintings hanging near the contested artworks at the time of the fire were later sold to Citadel founder Ken Griffin.
Cohen pointed to Perelman’s sales of some paintings on Friday, saying his failure to disclose them cast doubt on his credibility.
“The evidence showed that plaintiff sold paintings that were hanging right next to the paintings at issue and for higher amounts than covered by the policy,” the judge said.
Perelman’s lawyers declined to comment Friday on whether they intended to appeal the ruling.
Called the richest man in the U.S. in the 1980s, Perelman’s wealth has undergone a dramatic drop in recent years due in part to the struggles of Revlon, his most high-profile investment before its 2022 bankruptcy. His wealth was estimated at $19 billion by the Bloomberg Billionaires Index in 2018 but had fallen to $3.3 billion by 2021, the last year he was included in the ranking.
Perelman sold art worth nearly $1 billion after margin loans collateralized by Revlon shares were called, the case revealed.
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