Years after the fire in 2018, a prominent art collector and businessman Perelman claims that 5 artworks lost their spark, luster and depth and demands $410m for them. The insurance companies have argued that the works had “not sustained any detectable damages”.

Allegations of Damage: Oomph or no oomph?

At the heart of the dispute unfolding in Manhattan are five prized artworks—two by Andy Warhol, two by Ed Ruscha, and one by Cy Twombly—allegedly affected by the fire at Perelman’s East Hampton residence. Despite restoration efforts, Perelman claims the artworks have lost their intrinsic value and their “oomph” sparking demands for compensation.

The hearing, presided over by New York State Supreme Court Justice Joel Cohen on May 29th, marked a significant development: The claim will head to trial.

Unique Insurance Provisions

Perelman’s insurance contract includes provisions allowing him to surrender damaged artworks to insurers in exchange for the full insured value. Remarkably, a Warhol “Campbell’s Soup Can,” carries a fair market value of $12.5 million but is insured for $100 million. Similarly, Twombly’s Untitled (1971) is valued at $50 million on the market but boasts insurance coverage of $125 million.

The defendants include “certain underwriters” at Lloyds of London, Great Lakes Insurance SE of Germany, Swiss Re International of Luxembourg, AIG Property Casualty of New York, and Federal Insurance Company of New Jersey, according to Artnet.

Expert Testimony

Central to the court’s decision is the question of whether the artworks indeed suffered damage in the fire. Perelman’s legal team argues that the mere exposure to fire warrants recognition of damage, challenging the notion of visible evidence as the sole determinant.

Allegations of Misconduct

The legal battle is further complicated by allegations of misconduct during the insurance investigation. The insurers accuse Perelman of withholding information.

The legal proceedings unfold against the backdrop of Perelman’s financial challenges, including the bankruptcy of his company, Revlon Inc.