The sticky legal negotiations surrounding the liquidation of Lisa Schiff’s assets have recently grown even more contentious—and now filings in the matter appear to indicate that the dethroned art dealer is or will be subject to more criminal investigations and a federal grand jury subpoena, according to New York County Supreme Court documents.
The back and forth between an attorney for Schiff and an attorney assigned to oversee the distribution of Schiff’s assets, disclosed in court filings as the two tussle over how to proceed with the “voluntary liquidation,” also hinted at new mounting legal perils for Schiff.
The competing motions from Schiff’s lawyer John Cahill and the case’s assignee Douglas Pick have come with a flurry of exhibits, including records of email correspondence between the two. The conversations are revelatory, with one exhibit mentioning that Schiff is currently “subject to a Federal Grand Jury subpoena,” and that she is under investigation by both the U.S. Attorney’s Office and the New York District Attorney.
The New York District Attorney’s Office declined to comment. The U.S. Attorney’s office did not respond to request for comment.
The legal wrangling reflects the complicated nature of the case including the need to balance transparency about assets while sorting out creditor claims with also protecting privileged information and further, complying with the ongoing investigations.
Until mid-May, Schiff was a high-profile, well respected art advisor who maintained a well-appointed storefront office space in Tribeca. But a civil suit filed by her former client and close friend Candace Barasch and others revealed that Schiff had failed to remit $1.8 million owed on the resale of an Adrian Ghenie painting. Things snowballed quickly after that.
Following the immediate subsequent filing of a $3.3 million related suit by Barasch and her husband, Schiff shuttered her advisory business and voluntarily filed for insolvency reorganization.
Documents filed earlier this month in that case revealed that there are at least 50 creditors with claims to Schiff’s assets, some with claims of as much as $1 million. Another document listed 894 items currently in Schiff’s inventory, with an estimated market value of £3.1 million ($3.9 million) according to appraisers and advisory group Winston Art Group. Another document listed 108 works worth $1.1 million that were assumed to be in the inventory, but are allegedly missing and have “potential third-party claimants.”
The latest tranche of documents outline disagreements between Cahill and Pick that are largely tangential to the investigations but encumber the progress of the liquidation—and underscore how long and fraught the swirl of legal battles surrounding Schiff’s business are likely to be.
In a motion filed last week, Cahill sought the removal of Pick as assignee, objected to requested delivery of computers and other data storage, and also the retention of Pick’s law firm to assist in the case as well as that of an accounting firm that Cahill said is one of the largest and most expensive in the country.
Pick fired back with a 13-page cross motion filed yesterday (August 30) in which he describes unsuccessful attempts to obtain certain inventory and accounting records without having to resort to incurring additional fees. He also asserted that he previously alerted Cahill and others to the proposed retention of the accountants (Eisner Advisory Group) which he said was “Contrary to Mr. Cahill’s alleged ‘surprise…” at their enlistment. Pick also said it is not unusual to retain one’s own firm in such cases.
On August 4, Pick emailed Cahill, stating: “In order to avoid our filing a motion with the court to address our need for Ms. Schiff to respond to [the] whereabouts of the missing/unaccounted inventory we would request that you immediately reach out to Ms. Schiff and obtain answers for us. Obviously Ms. Schiff can speak directly to Winston Art Group to address the missing inventory.”
According to Pick, five days later, on August 9, Cahill “responded by attacking the Assignee and refusing to produce Ms. Schiff to respond to the above request and wrongly alleging that the Assignor is the sole decision maker in all matters.”
According to Cahill’s email: “Since you drafted it, negotiated it, signed, and filed it in the Court, you know that the Assignment to you does not entitle you, as Assignee or otherwise, to sue, defend, appoint attorneys, or seek to compel testimony, etc. from Ms. Schiff. You agreed that the Assignor would be the sole decisionmaker as to such and related matters.”
To date, according to Pick’s filing, he has retained the Winston Art Group to assist with locating all of the corporate artwork, as well as art stored at Schiff’s office and home, including at a subleased home in California, and to move it to one central location for inventory. He is also trying to ascertain to what extent property may be located in London.
Pick wrote that as part of his duties in the case, he has been reviewing and monitoring “among other things, [Schiff’s] bank accounts and banking transactions to determine and trace whether any monies deposited with [her] for a specific transaction were improperly diverted to or for the benefit of Ms. Schiff.”
Pick noted that an offer on two Ann Craven paintings for $36,000 has already been made and that all sales are subject to court approval. Further, he has received multiple offers relating to the art inventory and they are being carefully reviewed so as to maximize any recovery in the estate according to the filing.