Philip Boroff reports on Bloomberg that First Republic Bank has agreed to share some of the proceeds of the sale of Salander’s art with the unsecured creditors. The unsecured creditors were represented by Robert Feinstein who accused First Republic of condoning forgery to achieve its position as a secured creditor. At issue is First Republic’s $28 million secured loan which would leave no money for the remaining $272 million owed the unsecured creditors.
Julie Salander, the wife of the gallery’s proprietor, testified in October that her signature was forged on about a dozen First Republic loan documents. She said then she couldn’t say who forged her name.
Feinstein said in a sworn statement in February that he had evidence to make a claim that a First Republic officer “signed a document that forms the basis for a portion of the bank’s liens that he knew or should have known to be forged.” The agreement may render the allegations of forgery moot.
The discussion of profits from the sale of art work in Salander’s gallery may also be moot.
Salander said in a filing connected with his personal bankruptcy that he and the gallery bought “undervalued” artworks from the Renaissance period, with the aim of educating the public about their value and eventually selling the pieces.
Much of it now appears to be “of questionable value and authenticity,” said John Koegel, a New York lawyer who represents artists and their heirs who’ve filed claims against Salander-O’Reilly.
Bankrupt Dealer’s 400 Creditors, Bank Compromise in Fraud Case (Bloomberg)