A tale of an ill-drawn Will and 798 paintings told in two parts. ‘Silence is so accurate’. Mark Rothko once stated in a conversation with Elaine de Kooning. A bitter irony indeed when we consider that the painter’s own ‘silence’, the ultimate silence of death, resulted in one of the most monstrous and equivocal wrangles ever to beset the art world. Its repercussions are still being felt, the questions it raised are still being asked, and the issues involved are still far from being accurately appraised. The single most important consideration unearthed by the long months of testimony and litigation will forever remain to be contested: what are the criteria by which we presume to deem a man and his work ‘great’, and what contributing factors must we take into account in any such assessment? The answers arise, not from accumulated facts and figures, but from a series of hypotheses, which, however reasoned they might be, hinge on bias, human fallibility, and conjecture.

Mark Rothko died early in 1970 at the age of sixty-six. He took an overdose of sleeping pills and slashed the veins in both arms. Prior to his death he had been ill, hospitalised in 1968 after a heart attack, and increasingly depressed and dependent on drugs. The intimation is that, at the time of making his Will, he was under severe psychological and physical strain.

Rothko’s Will was drawn up, not by an attorney as is usual in the United States, but by the artist’s friend, confidant and accountant, Bernard Reis. Testimony confirms that the relationship between the two men was a deep one. Reis reputedly acted as Rothko’s general, as well as financial adviser, and took an interest in his marital affairs. In sum, ‘they were closer than most married people’ (Stamos). That Rothko trusted Reis is undeniable, and that this trust might conceivably have led Rothko to overlook certain legal details concerning the Will is quite compatible with what we know of the artist’s ‘spiritual’ orientation. Rothko, though obsessed with death and mortality, was, in all likelihood, less concerned with its temporal provision.

Rothko appointed three executors for his Will: Reis, Theodores Stamos, a fellow abstract expressionist painter; and Morton Levine, a professor of anthropology, all of them his close friends. He left 798 paintings at his death and by his Will they were to go to the Mark Rothko Foundation, which had five trustees, three of them being the executors named above.

Since 1963 Rothko’s work had been handled by Marlborough AG., a Lichtenstein-based art dealing corporation. In February 1969 the artist agreed to a binding eight-year contract with Marlborough AG., granting them the exclusive world-wide rights to represent him, and guaranteeing him $10,000 a year income during his life time, regardless of what might happen to Marlborough or the art market. Legal authorities are agreed that such a contract is binding not only upon the artist during his lifetime but also upon his estate and his heirs. Thus, at his death there was no question as to who would be responsible for the distribution and sale of Rothko’s work, but it remained to be seen in what ways the executors would see fit to dispose of the estate in their charge. The estate needed money to pay taxes, provide for the widow and children and supply funds for the Foundation, and to this end they entered, into two contracts with Marlborough in May 1970. One hundred paintings were selected by Marlborough from those left by the artist to the Foundation. The price paid for these was $1,800,000, from which $200,000 was paid direct to the estate, the remainder to be reimbursed over a twelve-year period, interest free. Further, the remaining 698 paintings were consigned to Marlborough at 50% commission. Thus the Foundation relinquished its right to the entire collection.

Marlborough Galleries Head is Said to Have Altered Evidence

Frank Lloyd, head of the international group of Marlborough Galleries, has been indicted, on charges that he tampered with evidence he was ordered to produce during the trial.

The indictment was announced yesterday by District Attorney Robert M Morgenthau of Manhattan. It was returned by a grand jury on February 24, but sealed pending efforts to locate Mr Lloyd. He is a British citizen who resides in Paradise Island, the Bahamas, most of the time.

Mr Morgenthau said he had asked Mr Lloyd’s lawyer, Peter Fleming, to produce his client, to no avail, and had therefore forwarded a warrant for Mr Lloyd’s arrest to Interpol, the international police agency. New York Times, March 9 1977

Financial requirements were not the reason for this deal. Arguably it would have been quite possible for the estate to retain Rothko’s original residual right to the independent sale of four paintings a year at 90% of the prices fetched, and as the actual selling price for the canvases was assessed at $40,000 in February 1970, and bearing in mind that the artist left $330,000 in cash, it would appear that there was ample provision for the necessary expenses. If this arrangement is questionable, it is far less so than the inordinately generous deals granted by the executors to Marlborough. Why?

To answer this question we must first examine Reis’s situation. He had been the accountant for Marlborough New York for ‘many years’, and was a personal friend of the director, Frank Lloyd. Apparently at the instigation of Mark Rothko, Reis became one of the directors of Marlborough Galleries Inc., on January 30, 1970, and it is worth noting that his liaison with Marlborough was not without its perks. Reis is alleged to have made a cool $1,000,000 through Marlborough’s lavish promotions of his own sales. In short, Marlborough afforded Reis ‘amenities of a prestigious and undemanding nature’ and ‘fringe benefits and perquisites’ which were ‘quite important to Reis’s lifestyle’. In spite of the fact that Rothko was aware, in appointing Reis his executor, of a potential ‘conflict of interest’, it was Reis, not Rothko, who was responsible for ensuring that such a situation was not exacerbated. That Reis was himself aware of ‘conflict of interest’ is clearly demonstrated. He deliberately never attended any policy negotiations or decision-making meetings, either between his co-executors or with Marlborough, but reserved the right to disapprove or to ratify what the others had agreed upon.

The average price per Rothko painting rose from $12,000 to $41,000 in less than two years. Only one year after Rothko’s death 12 canvases were sold at an average price of $80,000.

Theodores Stamos was in a no more commendable situation. Described by the Surrogate as ‘a not too successful artist, financially’, Stamos stood to gain a great deal from agreeable bargaining with Marlborough, and, predictably, in January 1971, he secured a contract with Lloyd, the terms of which were far more advantageous than those agreed in the Rothko contract. Moreover, Stamos’s contract contained a clause for drawing against his potential sales, which proved to exceed substantially the eventual proceeds from such sales.

Levine was in a more difficult situation and admitted to agreeing to contracts, which were in principle drafted by the others. He was party to what was going on, but claimed that much vital information was withheld from him. Certainly his vested interests were less than those of the others.

In July 1971 Rothko’s heirs, his children, sued the executors for wasting the assets of the Estate by disposing of the 798 paintings to Marlborough at unfairly low prices. In June 1972 all sales of Rothko’s work were curtailed by law pending litigation.

Marlborough had already sold 71 of the hundred works it owned and 69 of the 698 consigned, at an estimated $5,000,000. The estate had received in total $1,500,000. The average price per painting had risen from $12,000 to $41,000 in less than two years. Only one year after the death of Mark Rothko, Marlborough had sold twelve of the hundred canvases for $964,750, an average of more than $80,000 per canvas.

The court action began on February 14, 1974. The issues in question, apart from the unenviable responsibility of the Judge to assess the relative praise or blame of the parties concerned, were those of ethics, morals, value judgements and critical criteria, and the ultimate measure of all these elements was money.

‘Remember, I don’t collect paintings, I collect money’.

‘The case involving Mark Rothko’s paintings has nothing to do with art at all’ wrote John Corry in the New York Times. ‘It has to do with money and power in a very small world, and that is what so much of the art world has been about all along.’

The financial aspects of the case all focus on the central figure of Frank Lloyd. As Lloyd himself has admitted, he and his family are the sole beneficiaries of the massive Marlborough corporation, comprising twenty-one associated companies throughout the world. The Judge said, ‘The conclusion must be that Lloyd is Marlborough’, and, as such, his wealth is inestimable. Lloyd has an interest in supporting established ‘art stars’ for their investment value, and was quick to realise that business potentially, not in the exhaustible supplies of old master paintings, but in the vast reserves of contemporary art. ‘When I saw it was going to be difficult to keep on selling “important” art, I had to go to living artists,’ he said. People who have dealt with Lloyd complain that he doesn’t take enough interest in the creative side of art. ‘Remember, I don’t collect pictures, I collect money,’ he advises his employees.

Lloyd himself must be held largely responsible for the inflation of Rothko’s prices. If we are to assume that high prices are an indication of an artist’s stature (the accepted viewpoint of many trial witnesses), then we must also recognise the power of Lloyd and his fellow dealers to make or break an artist – in short, such individuals are the dictators of the art world and the consequent terms of reference are solely economic. Art has become an alternative currency where the artists’ works are seen ‘primarily as objects of investment whose worth rises and falls as the stock market fluctuates’. (Peter Deeley, The Observer Review). We arrive at the most bitter irony, best exemplified by this quotation from Dr Franz Pick’s World Currency Report, the art investors’ guidebook:

‘Double White Map by Jasper Johns, for $240,000, just about the price of 6 bars of fine gold’.

Many museums can no longer afford to buy art; institutions cannot always borrow it because the insurance is too high. Marinetti’s view of the art ‘cemetery’ is fast being realised. The labyrinth of a storage company in New York contains sizeable chambers stuffed with entombed art and a security system as tough as Fort Knox. The residue of Barnet Newman’s work is sealed in vast wooden crates, lost in the depths of Manhattan.

The case of Rothko is an extreme example of inflationary dealing. Though we might wish to lay the blame at the feet of the self-interested Lloyd and Reis, we are faced with the extraordinary fact that Rothko was himself instrumental in the inflation of his work, and also responsible for the failure to provide a safe future for it, however inadvertently he might have acted.

Rothko’s responsibilities arise from his attitude towards his role as an artist, and his ideology concerning his work.

It is well known that he was extraordinarily protective about his paintings. He conceived them in an almost spiritual way, after hours of deliberation and meditation, and effected them with holy precision. That he was zealously adamant about their presentation is clearly instanced by his refusal to fulfil the commission for the Seagram Building when he learned that the works were to be displayed in a room used for exclusive parties, preferring instead to donate them to the Tate Gallery where they could be exhibited according to his wishes and seen by anyone. He turned down the prestigious offer of the ‘Documenta’ show in1959, refused all offers of group shows and, after his major retrospective at the Museum of Modem Art in l961, he was never publicly exhibited until after his death. Rothko’s late paintings were infused with the mythical/religious experience which had become so important to him, and this helps to explain why he had so many in his possession when he died. A further reason was his mistrust and hatred of the art market. He said of this:

‘A picture lives by companionship, expanding and quickening in the eyes of the sensitive observer. It dies by the same token. It is therefore a risky act to send it out into the world. How often it must be permanently impaired by the eye of the unfeeling and the cruelty of the impotent who would extend their affliction universally’.

Another, equally far reaching aspect of the artist’s ideology is outlined by Werner Haftmann:

‘The painter’s main concern was not an aesthetic thing called a “picture”, but the relationship that was established between him and the space he had created to transform us’.

That Rothko was predisposed towards the intangible, transcendental aspects of the painter’s process as opposed to the end ‘product’ is instanced by the above quotation. Further, he stated that he wished ‘to destroy the finite associations with which our society increasingly enshrouds every aspect of our environment’.

Attitudes like this do not lend themselves to the urbane management of day-to-day affairs. Hence the artist’s oversight in making his Will. Attorney-General Harrow and Dr William Rubin both stated that Rothko conceived the Foundation as being primarily concerned to conserve his paintings and to display them under the most favourable conditions. They alleged that the ‘charitable’ clause in the Will, by which means the executors could justify the rapid disposal of the works in return for capital gains, was suggested to Rothko by Reis in order to meet a ‘legal necessity’, but that Rothko had no concept that such a clause would affect his entire estate. Indeed, the Foundation had been incorporated by Rothko during his life time for ‘general charitable purposes’, and it was not until after Rothko’s death and after the paintings had been disposed of that the certificate of incorporation was amended by Reis to specify that its assets were ‘to be devoted to older artists, musicians and so on’.

The glaring factor here is that the ‘older artists’ clause fits in so well with the respondents’ innuendo that Rothko was, by the end of his life, bitterly disillusioned. Therefore, they imply, he might wish his capital assets to go to such a cause. A wily move. The Judge decreed that neither Rothko’s own statements nor those of his friend and supporters, (Rubin and Harrow), had any place in a court of law, and ruled that the Will stood as a bona-fide legal document and as such was not to be interfered with by statements of an unsubstantiated nature.

However, Midonick was prepared to accept statements of a far more theoretical nature vis-à-vis the measure of repute attributable to the artist. At this point the case assumes its most ridiculous aspect.

In order to assess the ‘true value’ of the paintings in question, (the restitutional value of the works sold by Marlborough under the terms of the unfairly generous contracts), the court called upon a series of experts to give testimony as to the past and future standing of Mark Rothko.

There followed the most farcical interlude. The dealers, critics, and art historians, who had so carefully nurtured and fattened the baby of Abstract Expressionism to create the single most important movement in the history of American painting, were required to justify themselves. And they either responded with all the characteristic glibness and hyperbole which has for years now been at the root of public brainwashing:

‘When you can point to an artist’s ancestors and antecedents, and you can, with strong judgement, say that the antecedents (sic) would not have come after him had he not existed, he’s inextricable from the history of art’: Arnold Glimcher, Pace Gallery.

‘Both Professor Selz and Robert Goldwater . . . compared Rothko to Michelangelo and the professor stated that the artist’s paintings can be likened to Annunciations’: Midonick.

Or they passed the buck:
‘Anyone who was engaged in writing a book about contemporary American art would give considerable space to the work of Rothko … I have seen a number of publications in which Rothko is named as a leading modern artist, a very great artist.’ said Professor Meyer Schapiro, who also stated that he had seen a student rolling on the floor with joy in front of a Rothko painting at the Tate in 1955. This, he said, was ‘prophetic’ of things to come.

‘I don’t know how long Rothko is going to last. I hope he’s going to last long enough for everybody to enjoy the best of the highest prices he can get.’

The Judge concluded that ‘all the experts who appeared at the trial were in agreement that Rothko was a great master.

On the question of whether Rothko’s reputation would last, only one comment is worthy of note. Stamos:
‘I don’t know how long Rothko is going to last. I hope he’s going to last long enough for everybody to enjoy the best of the highest prices he can get’.

The prices as fixed by the court were $90,000 for canvases and $28,000 for works on paper.

The case of Mark Rothko poses innumerable questions and provides few answers. It unearthed much of the deceit, hypocrisy, self-interest and outright fraudulence of the art market. The Judge’s decision, favouring the heirs and condemning the ‘big business’ concerns, is a healthy intimation that money and prestige are not omnipotent, even in the United States.

But in examining the case in detail one is left with the single over-riding presence of the ‘silent’ artist. Rothko evokes an image at once haunting arid tragic. In his own words:

‘… the single human figure – alone in a moment of utter immobility . . . could not raise its limbs in a single gesture that might indicate its concern with the fact of mortality . . . Nor could the solitude be overcome.’

Moira Kelly

22,000 pages of evidence, an 87-page judgement, seven months of legal argument, four years of litigation and thousands of dollars in legal costs were expended, simply because Rothko did not specify in his Will precisely what he wanted to happen to his remaining canvases – 798 – when he died. He did not even mention them in his Will, made in 1968: he left his wife some money and their town house containing 44 of his paintings; the Seagram paintings he left to the Tate; and the rest, his ‘residuary estate’, he left to the Mark Rothko Foundation, a charity established by him during his life to help artists in need.

On February 25, 1970 he died. His estate passed into the hands of his executors, Bernard Reis, ‘ Theodores Stamos and Morton Levine, whose duty it was to distribute the estate in accordance with the Will; this they did, but when it came to the 798 paintings (which were worth more than half the whole estate put together) they decided to sell them and give the cash to the Foundation. Who was to argue, since Rothko’s Will was silent as to whether the Foundation should receive paintings or money, or both, and in what proportions?

Accordingly, in May 1970, the executors concluded two agreements: one was for the outright sale of 100 of the paintings, and the other was a twelve-year consignment (sale or return) contract for the remaining 698; both contracts were with the Marlborough corporation.

In July 1970 Rothko’s wife contested the Will, claiming that the ‘residuary estate’ – the 798 paintings – belonged to her and not the Foundation, because New York State’s probate laws did not allow more than half the total value of an estate to be left to charity, which is exactly what Rothko had done. The court granted her claim: the gift to the Foundation was bad and she was entitled to the ‘residuary estate’ as his next-of-kin. A month later she died and so her children, Kate and Christopher, inheriting the ‘residuary estate’ as her next-of-kin, asked the executors for paintings instead of money.

In June 1971 the children found out about the two agreements of May 1970 between the executors and Marlborough for the disposal of the 798 paintings, filed a suit against the three executors and Marlborough, and obtained an injunction from the court ordering Marlborough not to dispose of the contested canvases: they wanted the agreements set aside, the paintings returned and the executors removed, alleging that the executors had wrongly disposed of the paintings to Marlborough and at such a low price as to be a fraud on Rothko’s estate.

… All the evidence showed that the works were shortly re-sold for six to ten times the price paid to the estate for them.

On December 18, 1975 the trial closed when Judge Midonick gave his decision in favour of the children. The two agreements of May 1970 were set aside, because the executors had acted in breach of their duty of loyalty to the estate and had discharged their duties improvidently and negligently by making two agreements they knew to be unfair to the estate; and Marlborough had knowingly induced and participated in such disloyalty and improvidence. The consignment agreement was unfair: a reasonable term was five to six years, not twelve; no clause in it allowing renewal of minimum prices meant that there was a danger of ‘collusion, misrepresentation, favouritism, secrecy and outright fraud’; the ‘best prices’ could be determined only by Marlborough which, alone, had controlled the marketing and promotion of Rothko’s work since 1963; the commission rate of 50% was far too high for an artist of Rothko’s standing; no provision was made for restoration of paintings not sold during the twelve-year consignment period, so that after that time the paintings might be returned to the estate in bad condition; and the contract was altered by Reis, alone, after it had been signed making it even more favourable to Marlborough. The outright sale of 100 paintings to Marlborough was unfair, because all the evidence showed that the works were shortly resold by Marlborough for six to ten times the price they paid the estate for them.

Reis was found to have had a conflict of interest: on the one hand he was a named executor in the Will, with a duty to obtain terms the most advantageous to the estate in its dealings with Marlborough; on the other, he was the independent accountant turned salaried director-secretary-treasurer of Marlborough New York (with whom Rothko had an eight-year exclusive agency contract), with a duty to bargain for Marlborough in opposition to the estate. Instead of ‘tenaciously continuing to hold office’ after Rothko’s death, he should have sought the probate court’s direction, or have resigned from Marlborough. Furthermore, he knew of his conflicting position, informing his co-executors about his ‘dual position’ in a written memorandum to them, dated April 30 1970 – before the May 1970 agreements were signed – urging them to complete the deals as quickly as possible; they did so and then, without consulting or informing them, he altered the consignment agreement to the further detriment of the estate. The Judge further found that Reis’s conduct was a breach of loyalty to the estate ‘benefiting himself indirectly at the expense of the estate’ and that he had acted improvidently and negligently, ruling that ‘the standard of loyalty in trust relations does not permit a trustee to create or occupy a position in which he has an interest to serve, other than the interest of the trust estate. Undivided loyalty is the supreme test’.

These findings were made regardless of the fact that the agreements were unfair to the estate – that they were unfair merely worsened his offence. He was removed as an executor and denied his commission; together with Stamos and Marlborough, he was ordered to pay to the estate the current value of the 140 paintings already sold – including $9,252,000 for appreciation – and, to the children, their legal expenses.

Stamos was also found to have had a conflict of interest: as an executor with a duty to the estate, and as an artist who was currently negotiating with Marlborough for an exclusive agency contract. Of this conflict he was acutely aware, having argued with his co-executor, Levine, about the impropriety of continuing to act as an executor – all of this in April 1970, before the two agreements were signed. Judge Midonick observed that it was clearly to Stamos’s advantage ‘to curry favour with Marlborough’ – and so he did, knowing also of Reis’s dual position from the written memorandum sent to him by Reis the same month. Equally guilty of breach of loyalty to the estate and of acting improvidently and negligently, he was dealt with by the court in the same way as Reis.

‘.. docilely lent his approval to a deal of which he was distrustful.’

Levine was different. He was found to have acted not disloyally, but improvidently and negligently as an executor: he was aware of Reis’s dual role from the memorandum of April 1970, and of Stamos’s conflict of interest from their argument, the same month, over Stamos’s current negotiations with Marlborough – again, all before the agreements were signed in May 1970. Despite this knowledge of his co-executors’ disloyalty, he followed their leadership without investigating Marlborough’s prior sales of Rothko’s work, seeking competent and disinterested appraisals, or consulting an art expert. Instead, he ‘docilely lent his approval to a deal of which he was distrustful’. Because of his absence of self-interest or bad faith, he was ordered to pay to the estate only the actual value of the paintings sold at the date of the sales – including a lower measure of damages for appreciation, $6,464,880, with 6% interest; he was also removed as an executor and denied his commission.

Marlborough, the court found, had knowledge of the executors’ breach of loyalty to the estate because of Reis’s position as an officer of the corporation and because of the patent unfairness of the two agreements; it was dealt with by the court in the same way as Reis and Stamos as regards financial penalties, and was ordered to return the 658 unsold paintings to the estate.

Frank Lloyd and his family were the sole beneficiaries of the Marlborough corporation whose business transactions he alone controlled and directed. Judge Midonick held; and Lloyd had therefore colluded with Marlborough to bring about the sales of the estate’s paintings in violation of the court’s injunction not to do so: for that contempt of court, he and Marlborough were jointly fined $3,332,000.

Could the trial have occurred in this country? Probably not. The only reason the children were allowed to sue was because the Will – silent about the specific fate of the paintings – accidentally contravened New York State’s probate laws, which gave their mother and they as her heirs – the right to claim the paintings for themselves. Had there been no such law, as is the case in this country, the right to question the fairness of the agreements of May 1970 could have been exercised only by the Mark Rothko Foundation, which it would have been very unlikely to do: three of its directors were Reis, Stamos and Levine. Even more ironically, the Will containing the flaw, which allowed the children to claim the paintings, discover and set aside the agreements, was drafted by Reis.

What are the legal implications of this case for artists? Making a Will means exactly what it says – writing down what will happen to your work when you die. Take independent professional legal advice as to what you do want, before you make it, and get a lawyer to write it (Reis was an accountant); do not seek advice from a non-lawyer, a friend (Reis was Rothko’s close friend and confidant), or someone who will have a self-interest in your work after you die (Reis was Marlborough’s accountant); do not appoint executors who have, or may have, a self-interest (Stamos was keen to curry favour with Marlborough to secure an exclusive agency contract with them for his work); specify which works are to be left to whom (witness Rothko’s silence) and how they are to be exhibited, sold or otherwise dealt with in the decades following your death (the Turner Gallery dispute illustrates how meticulous an artist can and, perhaps, should be in this respect; Rothko said nothing).

Perhaps the most important and healthy impact of the case is that it exposed the sophisticated machinations of the art market, underlining the need for all artists to seek and take independent professional legal advice when entering into any arrangements, be they testamentary, contractual or otherwise. Only by doing this, will they ensure that their best interests and wishes are truly, clearly and fairly represented.

Sadly, this is not the end of the matter. Although the Judge ordered the 658 unsold paintings to be returned to the estate by Marlborough, it has not yet done so, and the children have had to bring at least one further court action against Marlborough – in Toronto, where some of the disputed canvases were later discovered. Furthermore, the defendants are not content to abide by Judge Midonick’s decision and have appealed to the U.S. Supreme Court for a further hearing and a final ruling. Is silence worth it?

© Henry Lydiate



This article is from the Artlaw Archive of Henry Lydiate's columns published in Art Monthly since 1976, and may contain out of date material. The article is for information only, and not for the purpose of providing legal advice. Readers should consult a solicitor for legal advice on specific matters. Artists can get free online legal information from Artquest.