He was going to sell it but it fell through, that is why he smashed the painting. Its so he can make an insurance claim. He even made sure to damage in front of a bunch of credible witnesses, one of which was that old wind bag Wawa Walters.
You\’re right that Wynn, like everyone else, would need to have an appraisal to prove value. In fact, he must have had such an appraisal to get his expensive policy to begin with. Lloyd\’s will not have written a policy without this documentation.
This is continuing to smell foul. Reminds me of several years ago when art dealers were getting hefty federal/local fines for under-declaring sales figures in order to minimize sales taxes, then shipping empty cartons to the low-tax-rate second home while the art itself went directly to the new buyers Manhattan residences.
Remember Tyco? Old Teddy K refined the scam. Betcha Wynne didnt pay the full tax, which is why hes trying to hide the original purchase price.
Hey you Claims Adjusters out there – does Wynne face a tax bill on the difference between what the adjusted loss is, less the residual value of the damaged item? What about the difference between what he originally paid for the painting and the adjusted loss amount? Is this a way to get around capital gains tax?
Mr. Wynn paid $48.4 million for the painting in 1997. The day before damaging the 1932 painting, Mr Wynn had agreed to sell it to hedge fund mogul Steve Cohen for $139m. That deal, which would have made it the most expensive painting ever sold, was called off after the painting sustained what Mr Wynn described as a \”silver-dollar-size hole\” in the arm of its subject, Picasso\’s mistress Marie-Theresa Walter. The damage has been repaired. It looks fine to the “naked eye” but is visible under a black light.
If the painting were insured for the full $139 mil, then Wynn would have a claim (not necessarily a loss payment) for $139 mil less the residual value of the painting, which to him is worth nothing.
The painting goes to auction in a repaired, noted and excepted condition, where it fetches say $60 mil (many great works have had damage repairs by great restorers throughout the years and it doesnt necessarily mean the works are trashed). Wynn then gets to claim $79mil, still much more than he paid for the work.
Problem for Wynn will be this – just because someone made a VERBAL offer to buy, it doesnt mean he can claim $139 mil as a \”market value prior to the date of loss\”. And it doesnt mean underwriters would have agreed to $139 mil for the piece, either – any valuation way out of whack with the rest of the Picasso market would still be subject to review and agreement by the carriers.
Chances are that Wynn et al didnt have the time to get London on board with a new set of numbers before he stuck in his thimb and pulled out a plum and said \”What a great way to get rich\”!
I would remind Art N.Shurer(mail 15th Jan) that standard Auto policies don\’t cover dimunition of value following damage – whether it was own damage or, caused by a third party. So the example is not in the least apt. In fact, an auto policy would only pay the cost for repair.
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He was going to sell it but it fell through, that is why he smashed the painting. Its so he can make an insurance claim. He even made sure to damage in front of a bunch of credible witnesses, one of which was that old wind bag Wawa Walters.
You\’re right that Wynn, like everyone else, would need to have an appraisal to prove value. In fact, he must have had such an appraisal to get his expensive policy to begin with. Lloyd\’s will not have written a policy without this documentation.
This is continuing to smell foul. Reminds me of several years ago when art dealers were getting hefty federal/local fines for under-declaring sales figures in order to minimize sales taxes, then shipping empty cartons to the low-tax-rate second home while the art itself went directly to the new buyers Manhattan residences.
Remember Tyco? Old Teddy K refined the scam. Betcha Wynne didnt pay the full tax, which is why hes trying to hide the original purchase price.
Hey you Claims Adjusters out there – does Wynne face a tax bill on the difference between what the adjusted loss is, less the residual value of the damaged item? What about the difference between what he originally paid for the painting and the adjusted loss amount? Is this a way to get around capital gains tax?
Smart Man, we gonna getcha!
Mr. Wynn paid $48.4 million for the painting in 1997. The day before damaging the 1932 painting, Mr Wynn had agreed to sell it to hedge fund mogul Steve Cohen for $139m. That deal, which would have made it the most expensive painting ever sold, was called off after the painting sustained what Mr Wynn described as a \”silver-dollar-size hole\” in the arm of its subject, Picasso\’s mistress Marie-Theresa Walter. The damage has been repaired. It looks fine to the “naked eye” but is visible under a black light.
Well, then, lets see if weve got this right.
If the painting were insured for the full $139 mil, then Wynn would have a claim (not necessarily a loss payment) for $139 mil less the residual value of the painting, which to him is worth nothing.
The painting goes to auction in a repaired, noted and excepted condition, where it fetches say $60 mil (many great works have had damage repairs by great restorers throughout the years and it doesnt necessarily mean the works are trashed). Wynn then gets to claim $79mil, still much more than he paid for the work.
Problem for Wynn will be this – just because someone made a VERBAL offer to buy, it doesnt mean he can claim $139 mil as a \”market value prior to the date of loss\”. And it doesnt mean underwriters would have agreed to $139 mil for the piece, either – any valuation way out of whack with the rest of the Picasso market would still be subject to review and agreement by the carriers.
Chances are that Wynn et al didnt have the time to get London on board with a new set of numbers before he stuck in his thimb and pulled out a plum and said \”What a great way to get rich\”!
I would remind Art N.Shurer(mail 15th Jan) that standard Auto policies don\’t cover dimunition of value following damage – whether it was own damage or, caused by a third party. So the example is not in the least apt. In fact, an auto policy would only pay the cost for repair.