Grossman LLP is picking up right where it left off last year, securing two significant victories last week in New York federal and state court art-related disputes. 

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The Firm Defeats Motion to Dismiss Client’s Claim to Recover Chagall Painting
 
On Friday, the firm achieved an important victory on behalf of a group of collectors asserting joint ownership of a Chagall masterpiece that was caught up in the fraudulent schemes of art dealer Ezra Chowaiki.  This new federal court ruling ensures that our clients can proceed with efforts to recover the painting they rightfully purchased years ago.
 
This case is one of many legal skirmishes arising from the 2017 implosion and bankruptcy of New York-based gallery Chowaiki & Co. and the subsequent criminal prosecution of its principal, Ezra Chowaiki, who ultimately pled guilty to federal charges in connection with fraudulent art dealings.  Grossman LLP has represented a number of Chowaiki’s victims—including dealers, collectors, and investors—in seeking redress for his fraudulent schemes.  In one of those cases, we obtained a complete victory on behalf of a different collector in a dispute over a different Chagall work, against the very same London dealers involved in last week’s ruling.
 
In last week’s win, the London dealers had sought to dismiss our client’s lawsuit, claiming, among other things, that they resold the artwork long ago.  But the Court has now upheld our right to seek recovery of the Chagall, or to seek money damages as an alternative remedy if in fact the London dealers are unable to produce the artwork—a win-win.

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Grossman LLP Secures Complete Stay of Action Asserted Against Art Dealer
 
The firm also achieved an important victory on behalf of an art dealer sued by a California-based art lender, securing a complete stay of the action while a related lawsuit plays out among multiple lenders claiming control of the same loan.
 
The lender sued our client under a loan and security agreement between our client and a different New York-based fund, arguing that it had acquired rights to the loan in a foreclosure sale; that the loan had come due; and that our client was in breach, and should make immediate payment of a ten-figure sum.
 
Our client denies any underlying breach—indeed, the original lender never claimed a breach—but before getting to the merits, and prior to any discovery, we moved for a complete stay of the action until the main suit among the competing lenders is resolved, arguing that allowing both lawsuits to proceed in tandem would risk inconsistent rulings and wasted time and resources.  Last week, a New York state court agreed with our position, staying the case in its entirety.  This important win not only saves time and money for the client, but if the original lender successfully prevails in the related lawsuit, any remaining litigation involving our client will likely be mooted entirely.