Perelman Takes Insurers to Court Over $410M Art Fire Claim

Perelman Takes Insurers to Court Over $410M Art Fire Claim

NEW YORK — A trial is underway in Manhattan over billionaire Ronald Perelman’s attempt to recover more than $400 million from insurers after a 2018 fire at his Hamptons estate. The dispute centers on five paintings, including works by Andy Warhol and Cy Twombly, which Perelman claims were damaged in the blaze.

Perelman, 82, filed the lawsuit in 2020, two years after the fire broke out in the attic of his estate, known as the Creeks. He says his insurance policies with affiliates of Lloyd’s of London Ltd., Chubb Ltd., and American International Group Inc. covered his modern art collection “from any damage, no matter how slight.” The policies allowed for full-value replacement, not just repair, even if the art was not for sale.

Insurers, who have already paid out more than $100 million related to the fire, argue that Perelman is seeking payouts for artworks he cannot prove were harmed. They describe the suit as a “money grab,” noting that some nearby artworks were later sold, including pieces acquired by Citadel founder Ken Griffin.

Paintings at the Center of the Case

The five paintings in question were encased in glass-like frames and removed from the residence after the fire. They showed no visible damage at the time and were reinstalled at the estate the next summer. While they were not part of the original insurance claim, Perelman’s staff told insurers the pieces were under observation.

One of the contested works, Warhol’s Campbell’s Soup Can, was insured for $100 million, though it was appraised at $12.5 million in 2018. According to testimony from a Perelman executive, the policies were structured to cover replacement with art of similar quality, regardless of market value or sale intent.

The trial is being heard without a jury by the Hon. Joel M. Cohen in New York State Supreme Court. Testimony is expected from Perelman, a Brooklyn-based framer, and expert witnesses from both sides. Jennifer Maas, a chemist specializing in art analysis, will testify for Perelman. Marion Mecklenburg, a conservator and engineer, is set to appear for the defense. Portions of Griffin’s deposition may also be presented.

The case also brings attention to Perelman’s financial situation. Once worth an estimated $19 billion in 2018, his wealth declined to $3.3 billion by 2021. His company, MacAndrews & Forbes Inc., previously owned major brands like Revlon, which filed for bankruptcy in 2022. Today, the firm holds smaller assets, including stakes in biotechnology and financial services.

Judith Wallace, chair of the art law department at Carter Ledyard & Milburn, noted that insurance disputes over art typically avoid public trial. “They’re very difficult to overturn,” she said, referring to typical private arbitration clauses in such policies.