<p>Case Study<br>Celebrated Estates</p>Mark Rothko (1903-1970)<p></p>

Case Study
Celebrated Estates

Mark Rothko (1903-1970)

Mark Rothko’s estate involved one of the art world’s most infamous legal battles between his successors and his Foundation. The case involved fraud and conspiracy by the artist’s most trusted advisors and a lengthy battle fought by his family to safeguard Rothko’s legacy.

Prior to his death, Rothko had established the Mark Rothko Foundation, which was led by a group of close friends who later also became the executors of his will: his accountant, a professor of anthropology, and a fellow artist. The Foundation was to be funded through paintings bequeathed to it and was intended to distribute Rothko’s work to public institutions internationally.

When Rothko took his own life in 1970, he left behind 798 finished paintings, worth approximately $32 million at the time. As his estranged wife died unexpectedly shortly afterwards, their two children were entitled to half the estate by law. However, Rothko’s executors used alleged contractual powers to appropriate the few works their father had gifted to them prior to his passing and sold 11 of Rothko’s paintings to the Marlborough Fine Art gallery at a sixth of their market value.

Rothko’s children subsequently filed suit against the estate and gallery, claiming fraud, conspiracy to ‘waste the assets’ of the estate, and breach of fiduciary duties towards the estate. The four-year long trial revealed numerous shady practices, including Marlborough’s under-reporting of Rothko’s sales prices to keep the artist’s perception of his market value low and dependency on the gallery high. A final appeal-decision determined that the works were sold far below market value, that the executors had acted negligently and under conflict of interest, and that any contracts between the estate and gallery were void. Further, the defendants were sentenced to pay $9 million in damages.

Contrarily, the court did not rule on the numerous works that had already been sold, many of which were of tremendous personal value to Rothko’s children. Together with the works sold to cover the legal fees, these paintings never returned to the family.

The case illustrates how an oeuvre can risk falling prey to the shady side of the art world if it falls into the wrong hands. While it shows the importance of selecting trustworthy executors, it also underlines that estate planning begins long before the artist’s passing, for instance with the selection of a reliable gallery and the drafting of a clear will.