Cityfile: New York's Most Notable and Influential

Ezra Merkin, the financier who steered $1.8 billion into Bernie Madoff's pockets, officially stepped down today as the chairman of GMAC, the financing arm of General Motors. The move was widely expected given the reputation-shattering events of the past few weeks, a staggeringly swift fall for a  resident of New York's richest apartment building and the president of one of the city's most prominent synagogues. But when there's blood in the water, the sharks turn up for dinner, which is why Merkin's art adviser, Ben Heller, says his phone is ringing off the hook. More

Richard Prince's appropriation art has long been popular with big-name collectors, but there's at least one person seeing red over Prince's most recent works, which went on display at Larry Gagosian's gallery last month and are featured in a new book by Rizzoli. Photographer Patrick Cariou filed a lawsuit against Prince, Gagosian, and Rizzoli last week for using a number of his photographs in Prince's "Canal Zone" exhibition without his consent, pics that Cariou alleges first appeared in his 2000 book, Yes Rasta. Prince, of course, has spent decades using other images in his works. What's different this time around? Cariou says that in the past Prince has typically relied on "anonymous commercial imagery." This time, though, he took advantage of Cariou's hard work since the photos in question were derived from the "ten years he spent in the secluded mountains of Jamaica, gaining access to, living and working with, and earning the trust of the Rastafarians who are the subjects of Yes Rasta." There's one party, though, who we imagine is very happy to have avoided any further legal trouble: disgraced author James Frey, who penned the text in Prince's book, but isn't named in the lawsuit. You can review the full suit for yourself below.More

Gagosian: Go Sell or Get Out | Gallerist Larry Gagosian may have to turn to the heavens above to help him sell overpriced art, since it appears his staff isn't getting the job done, at least judging by the memo he sent out to Gagosian Gallery employees in recent weeks. "If you would like to continue working for Gagosian I suggest you start to sell some art... The luxury of carrying under-performing employees is now a thing of the past." [Intelligent Life via Gawker]

As we noticed yesterday, certain quarters of the media seem to be under the impression that if, like a child covering his ears and shouting "lalalalala," they pretend that the scene down at the Miami Art Basel is as glitzy and cash-soaked as ever, people will believe it. "Recession schmession," crows Blackbook. "From the rumor that UBS would not tone down their annual dinner and gala—even amid scandal speculation—to the abundance of caviar on hors d'ouvre [sic] trays, it all smells like decadence to me." Well, it might smell like it, but to the dealers and artists actually trying to make money, "it's all about markdowns and modest expectations," reports New York's Alexandra Peers in a dispatch entitled "Kmart Special Time at Art Basel Miami."More

Art Basel Miami, the most talked-about art event of the year, is in full swing and all the usual suspects have turned up. At a party on Tuesday night hosted by the Times' T magazine and hotelier Andre Balazs, faithful scenesters like Calvin Klein, Takashi Murakami, Naomi Campbell, Rachel Zoe, Yvonne Force Villareal, Dasha Zhukova, and Ingrid Sischy all put in appearances. So how is it all going? It sort of depends who you ask! Judging by the breathless coverage on sites like Fashion Week Daily, all seems to be fine and well. It's "bigger than any recession-concerned naysayers could have predicted," reports Adam P. Schneider in a piece titled "The Best of Times." Over at Dasha's table, for example, the "important topic" on everyone's lips wasn't the recession; it was the "internet craze surrounding Shiba Inu puppies." Of course it was! Unfortunately, that cheerfulness escaped New York's Alexandra Peers, who reports that the fair itself had about half as many people as last year, and that everyone is still waiting for the gazillionaire buyers—like, say, Dasha's boyfriend, Roman Abramovich—to show their faces."Everyone is asking, where are the Russians?" Yes, Miami is very much empty at the moment, as we confirmed when we made a few phone calls this afternoon. More

So there won't be so many wealthy bankers as usual at the Miami Art Basel this week. But people can at least expect to see lots of top execs and clients of the fair's sponsor, Swiss banking giant UBS, right? Sadly for already-despondent artists and dealers, it looks like a few of them may be well-advised to stay away, too: The FBI is reportedly heading down to Miami to mount a sting operation to ensnare a certain breed of tax-evader: Those for whom art collecting is a convenient method of surreptitiously moving vast sums of cash around, and if you have an anonymous Swiss bank account, even better! More

This week's Miami Art Basel, the world's most important art fair and normally a scene of champagne-soaked excess as wealthy art lovers convene to outdo each other on spending tens of millions on star artists, has a gloomy cloud over it as the art market experiences a dramatic dive. The hedge funders probably won't be snapping things up—even those who haven't been crushed in recent months are likely to deem big spending unseemly—while buyers from the emerging markets like India, the Middle East and China, who had recently swelled the ranks of serious collectors, won't be making an appearance. More

It's official: The art market has crashed and just like with real estate, expensive artworks are now worth considerably less than their owners paid for them. Shares of Sotheby's, worth $50 a year ago, have fallen to $9, and the auction house is now planning to let staff go—or, as CEO William Ruprecht puts it, "we'll be resizing our organization." Previously white-hot artists are finding that collectors are no longer fighting to pay millions for their pieces, although it's hard to feel too bad for anyone who's ever sold a canvas daubed with paint for seven figures.More

No Takers for Visionaire | A collection of all 53 issues of Visionaire—the super-expensive, super-glossy fashion/art mag founded by Stephen Gan—went up for auction last night at Sotheby's in London, but failed to find a buyer. [Unbeige]

Galleries Slim Down | The downturn in the economy—not to mention last week's pretty disastrous auctions at Sotheby's and Christie's—appear to be taking a toll at art galleries around town. Pace Wildenstein has slashed 12 percent of its staff in recent days. [AFC]

Damien Hirst isn't the least bit troubled about last week's disappointing art auctions, or that one of his own works, a painting of four skulls called "Beautiful Artemis Thor Neptune Odin Delusional Sapphic Inspirational Hypnosis Painting," found no takers. It's actually a good thing! Hirst now says the art market was overpriced up until recently, and that his painting wasn't worth $3 million anyway: "It was bought from me less than a year ago at half the price. In a way it's good. We are looking at more realistic prices. People who bought things are not going to sell them that day. That is what an artist wants, for people to hang the works on their wall." Perhaps this means that Hirst, who is now reportedly worth more than $350 million, is planning to issue refunds to collectors who bought in at the peak? Not so much! "Art is worth what the next guy is prepared to pay," he says. But he does plan to adjust prices when he unveils his next batch of work. "If I want to sell new work, I'll price it lower."

You would think that after the dismal performances of the contemporary art sales at Christie's and Sotheby's earlier this week, sellers might recognize the need to reduce reserve prices if they were to have any hope of selling anything. At Phillips de Pury & Co.'s auction last night, estimates set before the markers unraveled remained in place, despite the fact that the auction house had tried to persuade people that the figures were now too optimistic. Sellers "had a luxury of eight years of the climbing prices,'' said Phillips senior partner Michael McGinnis. "They were not receptive.''More

Looks like Christie's is out $6.5 million. At auction last night, Richard and Kathy Fuld's collection of drawings failed to reach the $20 million that Christie's had guaranteed the couple. The sixteen works fetched just $13.5 million, in keeping with the lackluster response to many other lots on the block. (A 1964 self-portrait by Francis Bacon, estimated at $40 million, didn't attract a single bidder.) One of the Fulds' drawings that fetched a decent price was an Arshile Gorky that Matthew Marks paid $2.2 million for, although that still barely hit the low estimate. But just so you know, it wasn't as if there was any connection between Kathy Fuld selling the art and the spectactular downfall of her husband's career. "I've been selling things for the past few years," Kathy told a reporter recently. "But nobody cared until now." [NYT, ABC]

It will be a big night for disgraced Lehman CEO Dick Fuld and his wife Kathy: The couple's collection of postwar drawings goes up for auction at Christie's this evening. The Fulds reportedly made arrangements to sell the pieces over the summer—and the auction house gave them a $20 million guarantee, a decision it probably now regrets—although news of the sale emerged four days after the investment bank went bust. Works by Willem de Kooning, Barnett Newman, Arshile Gorky, and Agnes Martin will be available to those who still have a few million to spare (and who aren't too deterred by the Fulds' bad mojo). Meanwhile, some of the art that Dick once enjoyed seeing on the walls of Lehman Brothers will also be coming to market in the near future: The bankrupt bank is selling $8 million worth of pictures currently languishing in warehouses in New York and Paris. 

Not even the presence of high-profile collectors like Steve Martin, Valentino, and billionaire Eli Broad (who dropped $8 million on works by Ed Ruscha, Jeff Koons, Robert Rauschenberg, and Donald Judd) could save last night's Sotheby's contemporary art sale from being a big disappointment. Twenty paintings, including a Lichtenstein and a Damien Hirst, were left on the block, and the total tally was $125.1 million, far below the conservative presale estimate of $202.4 million. One genre that's apparently recession proof: John Currin and his trademark boobies. His "Nice 'n' Easy," an oil of two curvaceous naked women, went for a record $5.4 million. [NYT, Bloomberg]