Nearly seven years after billionaire Ron Perelman’s mansion in the Hampton was destroyed by fire, he asked a judge in New York State to rule that his insurance company compensate more than $400 million to make up for the loss of five famous paintings that he claimed were damaged in the fire. On June 10th, the lawsuit involving works by artists such as Andy Warhol and Seth Tombray went to court in Manhattan, revealing the rare inside story of insurance disputes over top artworks.
Perelman accused Lloyd’s, Chubb and AIG’s subsidiaries of refusing to fulfill their policy obligations. Its lawyer said that although the insurance company has paid out more than 100 million US dollars for more than 30 other damaged artworks in the fire, it refused to pay for the five most expensive works. The defense lawyer countered that these paintings “were actually undamaged” and the claim was a “money-grabbing operation” initiated by Perelman due to the financial crisis.
Perelman, now 82 years old, was once the richest man in the United States, but his wealth has shrunk in recent years. After Revlon, which he controlled, went bankrupt in 2022, he sold nearly one billion US dollars worth of artworks to repay loans. The insurance company pointed out that two of the controversial paintings had been planned to be sold to hedge fund tycoon Ken Griffin before the fire (his testimony may be played in court), questioning Perelman’s motivation to claim compensation “without damage”.
The trial is expected to last for three weeks, and both sides will summon witnesses such as chemists and art restoration experts. Perelman claimed that the painting was damaged due to the high humidity environment during the firefighter, while the insurance company emphasized that its claim lacked substantive evidence.
This case has rarely exposed the details of the game between the wealthy and insurance companies. Judith Wallace, an art law expert, pointed out that such disputes are usually resolved through confidential arbitration, but Perelman’s choice of public litigation may affect the formulation of insurance terms for high-value artworks in the future.
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