Crushing Verdict

One of the longest, costliest, most bitterly fought lawsuits in art history came to an end last week. It had been almost six years since Mark Rothko, whose large canvases filled with luminous rectangles of color had established him as a leader of American abstract expressionism, slit his wrists in his Manhattan studio, leaving his estate to a charitable trust for needy older artists. Under New York State law, Rothko's two children (Kate, now 24, and Christopher, 12) claimed 50% of it. Since 1970, the children and their lawyers alleged, there had been a conspiracy between Rothko's executors--Accountant

Bernard Reis, 80, Painter Theodores Stamos, 54, and Anthropologist Morton Levine, 53--and his dealers, Marlborough Gallery, Inc. of New York. Alleged purpose of the conspiracy: to "waste the assets" of the estate, which consists of 798 paintings, valued by one expert witness at $32 million.

After long pretrial hearings, an eight-month trial involving millions of dollars in legal fees and nearly 20,000 pages of transcripts, followed by 14 months of deliberation, New York Surrogate Millard Midonick handed down a crushing verdict. The executors, he found, had acted with "improvidence and waste verging upon gross negligence." They had sold 100 Rothkos to Marlborough for an "unconscionably low" $1.8 million. They had also allowed Marlborough an inflated commission of 40% to 50% on consignment sales of the other 698 paintings.

Two of the executors were found guilty of conflict of interest: Reis because he had been a salaried accountant at Marlborough, Stamos because Marlborough was the dealer for his own paintings. Surrogate Midonick removed the three executors from the estate, voided all contracts between them and Marlborough, and assessed $9,252,000 in fines and damages against them, Marlborough Galleries and Frank Lloyd, 64, Marlborough's owner. The total included a fine of $3.3 million against Lloyd and Marlborough for contempt of court in selling a group of Rothkos in defiance of a court order. Arthur Richenthal, trial attorney for Reis and Stamos, called the verdict "overkill and legally erroneous ... at best a Pyrrhic Victory for the Rothko children."

The question remains:

How can the money be collected? That, said New York Assistant Attorney General Gus Harrow at week's end, "is our headache, not the court's." Both Stamos and Levine are men of modest means, and though Bernard Reis owns a Manhattan town house and an art collection, it is not likely that more than a fraction of the $9 million could be extracted from him.

That leaves Marlborough and Lloyd. But the New York gallery is only a small branch of the Liechtenstein-based financial labyrinth that Frank Lloyd (TIME, June 25, 1973) has built up over the years, and its American assets would probably not satisfy the judgment. In setting the contempt fine at $3.3 million, Surrogate Midonick said that Lloyd could pay it off by returning the paintings he sold to European investors and dealers in defiance of the court's 1972 injunction. But, says Harrow gloomily, this effort to make Marlborough disgorge may not work: the Rothkos involved are now worth more than $3.3 million, and it may be cheaper for Lloyd to pay the fine.

It seems almost certain that Marlborough and the executors will appeal the verdict. The attorney general's office hopes so--before appealing, the losers may have to post a bond equal to the $9,252,000, which would give the plaintiffs some tangible assets to seize, if necessary. "I intend to pursue Lloyd anywhere in the world to get the money," announced Edward Ross, lawyer for Kate Rothko. But the prospects of getting it seem far from conclusive.

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