ART + MONEY
Nothing like bankruptcy to make for a "motivated seller." Financier J. Ezra Merkin, whose Ascot Partners reportedly lost $1.8 billion in the Bernard Madoff scam, is also one of the world’s largest collectors of paintings by Mark Rothko. According to a report by Lindsay Pollock in Bloomberg News, the art world is keeping a close eye on Merkin’s trove in case he is forced to sell his art holdings to raise cash. Merkin reportedly bought many of the paintings directly from Kate Rothko and the Rothko estate, which is handled by PaceWildenstein Gallery. The total value of the collection, which includes Rothko’s studies for his famous Rothko Chapel murals as well as the paintings originally made for the Seagram Building, is estimated at $150 million-$200 million. Though the paintings aren’t for sale now, “everything has a price,” said Ben Heller, 83, who helped Merkin buy the abstract expressionist paintings during the past five years. The Merkin’s collection was assembled between 2003 and 2008. Seven came directly from the artist’s estate and heirs, according to Heller. New York’s PaceWildenstein gallery represents the Rothko estate. Arne Glimcher, the gallery’s founder and director, declined to comment. “I am flooded with phone calls,” said Heller, the stepfather of actress Kyra Sedgwick who was himself a Madoff victim. Sedgwick also reportedly lost investments with Madoff along with her husband, actor Kevin Bacon, according to media reports.
The Rothkos, housed in Merkin’s Park Avenue duplex, include two 9-by-15-foot studies for murals that Rothko executed for the Four Seasons restaurant in the Seagram Building and Houston’s Rothko Chapel, and a third, smaller study for a Harvard University mural. The Four Seasons mural paintings are in the National Gallery in Washington.
Merkin’s Ascot Partners LP lost $1.8 billion from investments with Madoff, according to lawsuits. A second fund, the $1.5 billion Gabriel Capital LP, which also invested with Madoff, was closed last month. Also, GMAC Financial Services, the financial services arm of General Motors (GM: News ), Friday announced that its chairman, Ezra Merkin, resigned from the board, effective Jan. 9. Recently, Ezra Merkin was blamed by the investors for the investments made through Bernard L. Madoff Investment Securities LLC, whose founder has been charged in a massive Ponzi scheme fraud. Madoff's funds depended in part on so-called "feeder funds" that funneled investor deposits directly to Madoff. Merkin's Ascot Partners was one such feeder fund, directing "substantially all" of its assets to Madoff.
