White Collar Litigation Attorney Barry Slotnick Quoted on Art Insurance Case Involving Fraudster Lawrence Salander

Barry I. Slotnick, chairman of the New York Litigation Group at Buchanan Ingersoll & Rooney, was quoted in a September 12, 2010, article published by Crain's New York Business. Portions of the article, including Slotnick's comments, were run the following day in an article posted on the website ArtInfo.com. The Crain's article, titled "For collectors, a hard lesson in the art of the swindle," reported on fraudster Lawrence Salander, "the Upper East Side gallery owner who was sentenced last month to up to 18 years in prison for cheating clients and friends out of $120 million in fine art.

As explained in the article, "Most of the collectors had insured the art works they purchased through Mr. Salander. But it turns out there are several ways to steal a painting and — wouldn't you know it — some of them just aren't covered."

The article went on to discuss Salander's biggest client merchant banker Donald Schupak, who is being represented by Slotnick in the case. As reported, Schupak, "chairman of Triumph Apparel (formerly Danskin), is embroiled in a nasty court battle with his insurance company, which recently denied his claim, saying he was covered for loss or damage but not for a Ponzi scheme fraud. … Mr. Schupak purchased some $42 million worth of Renaissance art through the now-bankrupt Salander-O'Reilly Galleries, naming his investment vehicle Renaissance Art Investors, or RAI. He insured the works through AXA Art Insurance, one of the largest companies in the rarefied world of fine art insurance, paying about $100,000 in annual premiums."

According to the article, AXA argues in court documents filed last month in the Southern District of New York that it will "'pay for direct physical loss to the covered property, unless the loss is excluded in Section B' … AXA insists the insurance policy Mr. Schupak took out on the paintings — all 328 of them — listed fraud among the excluded circumstances in that dreaded Section B."

"RAI's alleged loss is not an accidental physical loss of artwork, but a financial loss resulting from a breach of contract by Salander," reads the court filing. "This claim was not covered."

"It's just an excuse not to pay," Slotnick said. The article noted Slotnick's past experience when it comes to art insurance law, including his representation of Steve Wynn in his battle with Lloyd's of London after the casino mogul accidentally ripped a hole in a Picasso.

"Unfortunately, insurance companies have a routine where they take our checks, deposit them as premiums, and then try and figure out how they're not going to pay," Slotnick said.