Reversing an earlier decision, Marlborough does not close its New York gallery, but it exchanges lawsuits with its ousted former president
A simmering legal battle between New York’s Marlborough Gallery and Max Levai, its ousted former president, is heating up as the sides exchange lawsuits filed on September 16.
Levai is suing the gallery for $10 million, alleging that the board conspired against him to stage a “coup” forcing him and his father, Pierre Levai, out of the family business.
“It’s unfortunate that it has come to this, but given Marlborough’s actions, I had no alternative,” Levai told Artnet News in an email.
The gallery, meanwhile, has charged the Levais with fraud, defamation and civil conspiracy, among other counts, in an $8 million lawsuit.
Gallery attorney Brendan V. Johnson told Artnet News that his complaint “makes it clear that while Marlborough Gallery ownership has always tried to find a constructive way forward, unfortunately an unfounded sense of entitlement seems to motivate the accused”.
And in a twist, despite the owners’ initial plan to permanently close the New York business, which was first reported in June, the gallery is being redeveloped and is set to reopen on September 26 under the direction of the merchant. Douglas Walla, founder of Kent Fine Art.
Marlborough is now set to open new exhibitions on September 26 with works by Magdalena Abkanowicz, Anselm Kiefer and Adolph Gottlieb, among others.
It’s a family business
Pierre Levai is the nephew of gallery founder Frank Lloyd and began running the New York branch in the 1970s, helping the dealer recover from a $9.2 million fine he was forced to to pay to fraudulently undervalue the paintings of the late Mark Rothko. Max Levai joined the gallery in 2012, initially focusing on contemporary art before taking over his father’s larger role in 2019.
Under Max Levai’s leadership, Marlborough, which operated three galleries (Marlborough Contemporary, Marlborough Fine Art and Marlborough Gallery), was consolidated into a single entity. The Upper East Side location, in operation since 1963, has been closed and the gallery has announced ambitious plans to buy the former Cheim & Read space in New York next to the Chelsea Art Tower, which it owned already, for a large-scale expansion. .
But behind the scenes, the outlook for the gallery had darkened, according to the complaint the Marlborough Gallery filed this week. The company reportedly lost $18.7 million between 2013 and 2019, of which $14.5 million was linked to Max Levai’s management.
“Max Levai failed to demonstrate his ability to develop the kind of relationships that had long sustained the Marlborough Gallery, leading to a decline in performance,” the complaint states. “Pierre Levai did not review Max Levai’s performance and remained blindly committed to allowing Max Levai to transition to the position of Chairman by 2019.”
Even before the pandemic, the “board of directors repeatedly pressured Max Levai for business and financial planning that would support the continued viability” of the business, the gallery’s complaint states. “The information provided to the board did not provide assurance that gallery operations could be maintained in a responsible manner.”
On May 29, the board voted to permanently close the New York gallery and break the agreement to purchase the new space. Both lawsuits acknowledge that Max Levai had the option of leasing the gallery’s real estate and purchasing Marlborough’s inventory as he transitioned to operating his own business under a new name.
But Marlborough’s complaint says negotiations with Max Levai broke down when the terms he demanded would have “represented a loss of at least $10 million” to the gallery. The gallery also claims that Levai used the gallery’s inventory to open the Alone Gallery in the Hamptons without crediting Marlborough. (Levai’s complaint insists the board knew about the business and that it was designed to “increase gallery revenue.”)
The gallery also accuses Max Levai of having made false statements to Artnet News about his father’s state of health and of having falsely told the media that he had left the gallery, when he would continue to be an employee.
He also accuses Levai and his father of “misappropriating unauthorized corporate funds to support Max Levai’s misguided venture into the restaurant and nightclub business.” (This business, called Happy Ending, made headlines in 2015 when a woman accused an employee of rape, and investor Julia Fox claimed she was assaulted there by the club’s manager, her ex. (boyfriend. Max Levai was not involved in either incident, but alleged that the assault allegations were related to extortion attempts.)
Marlborough also claims that Pierre Levai hid the whereabouts of 23 works of art from the gallery’s stock by loaning them to Marcia Levine, a “close” friend of his who occasionally did sales for the gallery. The gallery seeks the return of these and other works, in addition to damages.
Max Levai has his own perspective
But Max Levai says the gallery never really planned to close and broke off communications after submitting a list of Marlborough artworks he wanted to acquire.
He argues that the council’s decision to oust him and close the gallery was orchestrated while Pierre Levai was ill with COVID-19. (The gallery maintains that a member of the board of directors informed Pierre Levai of the decision to close the New York branch during a personal telephone call, during which Pierre Levai confirmed “that he was well in his healing”.)
A particular point of contention is an Instagram account that Max Levai claims to have opened as a personal account under the name in 2013, before voluntarily changing the name to officially associate it with the gallery.
On leaving the gallery, he says he changed the account name to @maxlevaiart “to reflect his separation from Marlborough”, only to have a member of gallery staff change the password and rename it to his old handle. .
Levai’s lawsuit names gallery board members Stanley N. Bergman and Franz Plutschow and accuses them of “undertaking to destroy Mr. Levai’s reputation, damage his relationships with artists, and other industry figures and hijacking his valuable social media account in an effort to block Mr. Levai’s ability to succeed on his own.
As a result, according to the suit, he was “unable to make a fresh start after being unceremoniously terminated.”
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