The Picasso heirs are at it again.
After a seven-year battle in the French courts to settle the $260-million Picasso estate, the U.S. courts have now become involved in a Picasso family dispute over reproduction rights potentially worth millions more.
Under French law, the reproduction rights for a work of art are separate from the original work, and can be sold or bequeathed. "The legal question before us," said attorney Martin Bressler, representing the plaintiffs -- Claude Picasso, Paloma Picasso, Bernard Picasso and Maya Picasso Widmaier et al. -- "is this: If each of the heirs has been given X number of pieces, who owns the rights to reproduce them? Our position is that all the heirs own the rights jointly, no matter who owns the individual picture."
Picasso's granddaughter, Marina, 30, daughter of Paulo (the only legitimate son) does not agree. Last December, acting on her own, she sold the reproduction rights to 1,000 of the works she inherited (in her $35 million share of the estate) to a New York art-investment tax-shelter firm called Jackie Fine Arts for $22.5 million. It was understood the lithographic plates would be made by Jackie and used to publish 500 "limited edition" reproductions of each work. Marina agreed to number and sign each one in pencil in the margin: "Collection Marina Picasso."
"Our position," Bressler said yesterday, "is that what they're selling is going to so confuse the public that it will damage both the buyers and the value of the original art."
On behalf of all the other Picasso heirs (except the widow, Jacqueline, who waived reproduction rights), Bresser took steps in May to stop production of the prints. Jackie Fine Arts has now replied with an action that asks a potential $200 million in damages.
The attempt to stop the printing and sale of the reproductions was complicated by the fact that Jackie Fine Arts, as part of its tax-sheltering plan, had already resold some of the lithographic plates on which chromists had reproduced the original images (called "art masters") to various investors, together with the rights to make 500 limited edition prints, posters and other reproductions from these plates. "To stop the project," said Bressler, "we had to have the names of these owners, so we brought a proceeding against Jackie in the Supreme Court of New York requesting them to turn over names so we could commence a lawsuit."
In May, according to Bressler, "the court granted the request to turn over the names, but Jackie appealed the decision, asking for a stay from the order to turn over the names until the appeal is heard and decided. The court agreed, but said Jackie could not dispose of reproductions until the appeal is heard and decided, and that must happen by September."
In response, Jackie Fine Arts filed a complaint against Claude Picasso et al., asking for three things according to court records:
An injunction to prevent Claude Picasso et al. from continuing to interfere with the sale of Jackie's "art masters."
A judgment from the court stating that Marina Picasso had the right to transfer reproduction rights to Jackie.
Threefold damages for losses sustained by Jackie while they were unable to sell the reproducitons ($2.8 million as of May 15) and three times the damages sustained by the time the decision is made -- potentially $200 million, according to court papers filed by Jackie's attorneys, Chadbourne, Parke, Whiteside and Wolf. According to Jackie, some 200 investors have already purchased plates from the Picasso project.
"All we want," said a spokesman for Jackie's, "is to forget about lawsuits and go back to business."
The tax-shelter part of their business, according to Jackie Fine Arts administrator James Haber, works as follows: Each individual investor buys reproduction rights to one Picasso and receives the lithographic plate upon which a chromist has reproduced that painting. "They pay $100,000 in cash, over three years, toward the total purchase price of $550,000 the difference being a note payable out of a sales proceeds due no later than 1994," Haber said yesterday.
"Their tax benefits," Haber said, "are depreciation on the $550,000 over a nine-year period and an investment tax credit of $55,000 in the first year. In order to get optimum tax benefit, investors should have a taxable income of approximately $250,000," he said.
The Internal Revenue Service does not discuss specific cases, but a spokesman said yesterday that a late-1979 revenue ruling stated that taxpayers attempting to invest in some kinds of art-investment tax shelters "may find that it will not produce the expected tax advantages."