Tuesday, June 30, 2009
Merkin's Art Collection to be Sold and Funds Placed in Escrow Pending Resolution of New York AG's Suit
STATEMENT FROM ATTORNEY GENERAL ANDREW CUOMO ON THE SALE OF J. EZRA MERKIN'S ART COLLECTION:
"Earlier this morning in New York State Supreme Court, my Office submitted a stipulation and order regarding the impending sale of J. Ezra Merkin's art collection for $310 million. The art was owned by Mr. Merkin and his wife. This sale will yield, after liens, taxes, and fees, approximately $191 million that will be restrained and frozen in an escrow account pending resolution of the case against Mr. Merkin. This will preserve assets that, if our litigation is successful, will provide restitution to victims of Mr. Merkin's alleged fraud.
The art sale order submitted today was the product of weeks of extensive negotiation. Based on an appraisal performed by Christie's at the request of my Office, we believe the sale price of $310 million is fair, appropriate, and in the best interests of investors. I want to thank Christie's for their work on this matter.
We believe it is only fair that Mr. Merkin liquidate his valuable art collection, which he purchased with the fees he earned from his investors, and keep the proceeds in escrow pending resolution of our lawsuit. The $191 million that will be preserved in this way will not by itself make investors whole, but this is an important step in the right direction for investors.
We will continue to seek full recovery for investors' losses through the ongoing action against Mr. Merkin, which charges him with concealing from his clients the investment of more than $2.4 billion with Bernard L. Madoff. As detailed in the 54-page complaint we previously filed, investors, including several prominent charities and non-profits, entrusted their investments to Mr. Merkin, who then steered the money to Madoff without their permission, in exchange for $470 million in management and incentive fees."