As the legal battle between collector Ron Perelman and insurance companies begins, we are faced with the question: how exactly do we place price tags on art?
For some backdrop, in 2018, Perelman’s East Hampton estate caught fire. While it didn’t cause a major hazard, the fire did touch many objects – including 5 artworks. Apart from being made by the likes of Ed Ruscha and Andy Warhol, the paintings had another special thing about them – they were collectively insured for $400 million. Ron Perelman filed an insurance claim for the full amount, citing that the smoke and the sprinklers impacted the pristine quality of the work and lowered its market value. The companies refused. After 7 years and more than 1500 court filings, the case is now finally before a judge.
One of the core pillars of Perelman’s suit is that the paintings have lost their “oomph“. But the question presented before everyone is how to measure ‘oomph’? Assessments of the paintings show no visible, tangible damage. There might be unseen damage, some effect that might reduce the overall lifespan of the works. But there is no way to either measure or prove it.
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Perhaps the bigger question is the monetary worth of the works. Art appraisers have often faced criticism for the opaque process of assigning price tags to artworks. Furthermore, the volatility of the art market means that the price of a work during an assessment and at any time in the future almost always differs. Ultimately, everything in the art market works on perception. So would Ron Perelman be able to prove that the value of his works has dropped from a previous arbitrary point to a new arbitrary point, not due to the market but solely due to the fire damage? We can’t wait to see.
