Billionaires' ugly divorce ignites battle over spectacular art trove

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Billionaires' ugly divorce ignites battle over spectacular art trove
Giant images of the real estate developer Harry Macklowe and his new wife, Patricia Landau, on the side of a luxury condominium building that he built in New York on March 9, 2019. Macklowe's divorce from Linda Macklowe is the latest rancorous breakup in the moneyed world of New York, but this one comes with the added twist of an impressive art collection that has been valued at as much as nearly $1 billion. Holly Pickett/The New York Times.

by James Barron



NEW YORK, NY (NYT NEWS SERVICE).- There is the $72 million apartment, so large it runs the full length of one side of the Plaza Hotel, with windows overlooking Central Park. A second Manhattan apartment is high up in one of the tallest buildings in the Western Hemisphere, along the so-called Billionaires’ Row.

The $19 million house in the Hamptons on Long Island has neighbors with boldface names, including Martha Stewart and Steven Spielberg. The $23.5 million yacht is a 150-foot-long prizewinner.

And then there is the art collection, an enormous trove of masterpieces that the judge presiding over the divorce described as “extraordinary” and “internationally renowned” and that has become the latest chapter in the exes’ rancorous unraveling. Among the more than 150 pieces are multiple works by Pablo Picasso, Jeff Koons, Willem de Kooning and Mark Rothko.

The exes’ lawyers have fought about what most of them were worth — one rare moment of agreement came when two art experts hired separately by the exes both valued an Andy Warhol creation filled with images of Marilyn Monroe at $50 million — and who should get them.

The ex-husband is Harry Macklowe, the real estate developer who has had highs (he built the building on Billionaires’ Row) and lows (he had to sell the General Motors building in Manhattan in 2008 as the financial crisis spilled into the commercial sector).

The ex-wife is Linda Macklowe, an honorary trustee of the Metropolitan Museum of Art, who is passionate about collecting modern art.

Their divorce is the latest rancorous breakup in the moneyed world of New York, but this one comes with the added twist of an impressive art collection that has been valued at as much as nearly $1 billion.

The Macklowes’ wealth made them prominent in the Manhattan celebrity whirl for years. They were mentioned regularly in gossip columns and were photographed at gala after gala: for the Guggenheim Museum (Linda Macklowe is a vice president of the foundation that runs it), for Alzheimer’s disease research and for the Paris Opera (at its gala last year, Harry Macklowe was seated next to Princess Marie-Chantal of Greece).

But in 2016, Harry Macklowe told his wife that the marriage was over. The tabloids soon reported that he was having an affair with Patricia Landeau, president of the French Friends of Israel Museum, in Jerusalem.

By the end of last year, the Macklowes’ divorce had been granted. Harry Macklowe married Landeau in March, a few days after he put giant his-and-her photographs on the side of a building. The building happened to be the one on Billionaires’ Row that he built.

But the wrangling continued over how to divide what Harry Macklowe, 82, and Linda Macklowe, 81, amassed in 59 years of marriage — an art collection that David Redden, a former vice chairman of Sotheby’s, called “fairly staggering” and “one of the great prizes.”

“The art world will be fighting over it,” he said.

An appeals court recently upheld a lower-court ruling that gave Linda Macklowe the apartment in the Plaza and $39 million worth of the art.

But the $50 million Warhol? It will have to be sold, along with the rest of the collection.

The ruling, by Justice Laura Drager of state Supreme Court, gave Harry Macklowe the yacht (his ex-wife got a credit for $3.28 million) and cars that the judge said were worth $385,000. Linda Macklowe got the silver, which the judge said both sides agreed was worth $409,500; jewelry valued at $3.8 million; and books valued at $85,500.

When she was reached by phone the other day, Macklowe said that she was “not talking about anything” and that she had “no interest in discussing” the case. A spokeswoman for her lawyers said they would not comment.

Harry Macklowe did not return calls to his office. Dan Rottenstreich, a lawyer who represented him in the divorce trial, would not discuss the case.

To many New Yorkers, Harry Macklowe is known as the developer whose company tore down several single-room-occupancy hotels in the middle of a winter night in 1985 to beat a moratorium on demolition that was about to take effect. He ultimately paid $2 million to settle a lawsuit the city had filed.

The Macklowes, who have two adult children, join a long parade of high-profile, big-money divorces in the rarefied precincts of Manhattan. One case that drew attention in the 1990s was the divorce of Ivan Boesky from Seema Boesky, who were identified as Anonymous I and Anonymous II in court papers. Ivan Boesky was a high-flying arbitrageur before he pleaded guilty to insider trading.

And President Donald Trump is now on marriage No. 3 after two tabloid-fodder divorces.

“There’s no question New York’s position as a center of wealth and a center of litigation tends to invite some of the largest and nastiest and prolonged divorces in the country,” said David Pikus, a principal in the Manhattan law firm of Bressler Amery Ross.

“The biggest problem you have with high-money divorces is the litigants have the money to spend,” he said. “It’s a vicious circle. The larger the stakes in the divorce action, the more inclined litigants are to fight over them.’’

Jay Goldberg, who was one of Trump’s lawyers in his breakups with Ivana Trump and Marla Maples, said big-money divorces sometimes turned on matters far less consequential than an art collection worth hundreds of millions of dollars.

The sticking point in one case, he said, was who would get the Frank Sinatra records.

“The more money the people have, the greater tendency there is to turn to issues that seem silly,” Goldberg said.

Other prominent exes have also squabbled about their art. Robert Soros, a son of billionaire investor George Soros, feuded with his estranged wife, Melissa Schiff Soros, over their collection, according to Town & Country magazine, including a Christopher Wool word painting that spelled “FOOL.”

In the Macklowes’ divorce, David Boies, a lawyer who represented Harry Macklowe in the appeal, told the appeals court that the former spouses had to unload the art “to sustain their lifestyle.”

“They don’t have the cash,” Boies said, noting that 60% to 75% of their assets were tied up in the art collection. (Drager said each ex-spouse was to receive $689,941, half of the money in their three joint bank accounts.)

Harry Macklowe was No. 239 on Forbes magazine’s 2007 list of the 400 wealthiest Americans, with a net worth of $2 billion ($2.48 billion today). That was when he still owned the GM building. He has not made the Forbes list since.

As for the value of the art, during the lower-court proceeding, each side hired an expert to appraise the art. Harry Macklowe’s expert estimated the value at $788 million; Linda Macklowe’s expert said $625 million.

Their totals were well under a 2015 valuation done by Christie’s for an insurance estimate, which said the collection was worth $937.5 million.

“If this had been a case with one or two fewer zeros, it would be an ordinary kind of dispute,” Boies said. “Because of the prominence of the parties and the amount of money involved, this is a case that attracts natural attention.”

But the Macklowes attracted attention long before the divorce papers were filed. Author Vicky Ward, in a 2014 book about Harry Macklowe’s quest to own the General Motors building, wrote that the marriage was “a relationship often compared to an Edward Albee play.”

“Both Macklowes have been heard to disparage each other and their marriage, forcibly and publicly,” Ward wrote, adding, “Yet they were inseparable.”

The Macklowes acquired so many paintings and sculptures that their apartment in the Plaza could not hold them all, even if one real estate appraiser called it the largest one-bedroom he had ever seen. (It was originally seven apartments. They bought them all and demolished the walls.)

Some works in the Macklowes’ art collection went to their home in the Hamptons, where Harry Macklowe famously feuded with a next-door neighbor, Stewart, over a hedge. Other pieces went into storage.

The art collection began as a “quiet pastime,” Ward wrote. But she quoted a friend as saying that “it truly became the dominant, driving force” in Linda Macklowe’s life.

Ward wrote that Harry Macklowe “liked it for different reasons.” He prized the theater of the art world — the thrill of auctions and the hobnobbing at gallery receptions.

Drager noted that art had been a mutual interest during the Macklowes’ marriage. Harry Macklowe even “developed relationships with artists and gallery owners, including assisting people in the art world with real estate transactions.”

Selling off their holdings is likely to be an art-world happening. “My sense is this would be one of the major art collections to arrive at auction within the past decade,” Lark Mason, president of the Appraisers Association of America, said.

He mentioned two sales last year at Christie’s — the sale of the David Rockefeller collection, which brought in $865 million, and the auction of the Barney Ebsworth estate for $372.5 million. Ebsworth was an entrepreneur who started Royal Cruise Line and the tour operator Intrav.

“I think this would be on par with those,” Mason said, because of “the name recognition, the focus on quality from what I understand that they had, and the types of materials that they collected, which from what I understand was a good variety.’’

Drager indicated that she would appoint a receiver to work out a plan for selling the art.

The couple and their experts could not agree on what the collection was worth, but there was a bigger issue: Linda Macklowe did not want to let anything go. “She stated that she wished to enjoy the collection and sell individual pieces only as necessary to support her standard of living,” Drager wrote.

That would have posed tax problems for Harry Macklowe, said his lawyer, Boies. “The wife wanted all the major pieces of art to go to her, and she would decide what to sell and when to sell it,” he said. “The husband would have to pay taxes on what would be sold, because the value that would be attributed to the works would be the after-tax value. She would keep the art, the art would get sold and he would pay the taxes.”

Drager said that given the discrepancies on valuations, averaging them was not possible. The appeals court agreed, rejecting Linda Macklowe’s proposal to have a neutral expert value the collection.

The appeals court seemed to suggest there was no time to waste.

Bringing in another expert, the justices wrote, “would serve only to prolong this litigation between octogenarians.”

© 2019 The New York Times Company










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