Rothko Case

The Rothko Case was the dispute between Kate Rothko, the daughter of the painter Mark Rothko, and the directors of his gallery [http://www.marlboroughfineart.com/ Marlborough Fine Art] . Shortly before his death in 1970, Rothko made gifts of certain key paintings that he had retained to his two children, believing that his key patrons would pay inflated prices for the works following his death. Therefore, financial security would be provided to his children. However, following his death, Rothko's children were notified by the gallery's founder, Frances Kenneth Lloyd, that under the terms of the agreement made with them in 1956 and renewed in 1969, the gallery owned all of Rothko's paintings.

Following Rothko's suicide in 1970 the three executors for the estate agreed to sell 100 works to Marlborough for a total of $1,800,000 while a further 698 works were consigned to the gallery for sale at a fixed commission of 50%. Of Rothko's three executors one, Bernard Reis, was a director of Marlborough and a second, Theodoros Stamos, was an artist represented by the Gallery. However only $200,000 was paid upfront to the estate. In the year following Rothko's death the value of his work more than doubled while early works were selling at auction for over $80,000. In 1971 Kate Rothko sued to release the estate from the sale agreement and have the paintings returned to the family.

In the following case it was revealed that, when still a struggling artist with a young family, Rothko had agreed to a deal with the gallery that all of his paintings would be sold through the gallery in exchange for a set monthly fee. These kinds of terms were not unheard of, as Pablo Picasso had had a similar deal with his gallery in the 1920s.

It emerged from the trial that the gallery defrauded Rothko and his estate through various methods. The gallery had filtered payments for works through accounts in Switzerland and Liechtenstein to ensure that values were under-presented. During the 1960s this led to a huge underestimate by the artist on the value of his works. As a result, he agreed to consignments of dozens of paintings to the gallery and collectors without appreciating the full value. It was also revealed that the gallery had been stockpiling works to ensure a heightened value in the market after his death. The 100 paintings 'sold' by the estate through Marlborough had been retained by the gallery and were quickly 're-sold' for 5 to 6 times the declared value. Certain directors at Marlborough were convicted of defrauding the Rothko family and the Gallery was ordered to pay over $9million in 1975 and costs and return 658 paintings it held by the artist. Marlborough disputed the return of the paintings.

See Gerstenblith, Patty. Art, Cultural Heritage, and the Law. Pp. 336-344. Carolina Academic Press, 2004/2008. http://www.amazon.com/Art-Cultural-Heritage-Law-Materials/dp/1594600996.