A New York judge has rejected billionaire investor Ronald Perelman’s attempt to collect $400 million from insurers over claims that five paintings were damaged in a 2018 fire at his East Hampton estate.
Justice Joel M. Cohen, of State Supreme Court in Manhattan, ruled that the works - including two by Andy Warhol, two by Ed Ruscha, and one by Cy Twombly - showed “no visible damage” and “nothing traceable to the fire” that would diminish their value. The judge said the pieces “can be enjoyed as they were before,” undercutting Perelman’s assertion that humidity, smoke, and soot had dulled their color and contrast.
Perelman, once ranked among America’s wealthiest men, took the witness stand earlier in the case, describing how five of his most prized paintings lost their visual brilliance following the blaze at his waterfront compound known as The Creeks. The fire began in the attic in 2018.
According to a report from ARTNews, the case, which now in its third week before Justice Cohen, pits Perelman against affiliates of Lloyd’s of London, Chubb Ltd., and American International Group Inc. While insurers had already paid more than $100 million for other works damaged in the same incident, they disputed Perelman’s attempt to recover $410 million for these five pieces.
Insurers push back
Perelman argued the fire robbed the works of their “spark” and “oomph.” His attorneys claimed microscopic or chemical changes had reduced their luster and depth, even if not visible.
The insurers countered that the claim was exaggerated and tied to Perelman’s financial pressures following the collapse of Revlon stock, which had long supported his borrowing. They pointed to his sale of 71 works between 2020 and 2022, raising nearly $1 billion, as evidence he continued to treat his collection as marketable.
The trial delved into the contested definition of art damage, with conservators and chemists offering conflicting views on whether humidity could cause long-term deterioration. Insurers dismissed much of this evidence as “unscientific and unreliable.”
The proceedings also spotlighted Perelman’s ties to major art market players. In 2020, Citadel founder Ken Griffin and gallerist Larry Gagosian visited The Creeks to view works in the dining room where the disputed pieces hung. Griffin later purchased another painting from Perelman for $30 million. Insurers cited the visit as evidence that Perelman contradicted himself, first presenting the works as marketable before later declaring them impaired.
Court’s decision
Perelman’s lawyers emphasized that insurers had already covered more than 30 other works damaged in the fire, including pieces located on the same floor. They argued policy terms entitled him to recover the full insured value even for nominal damage.
While siding with the insurers, Justice Cohen stopped short of finding that Perelman intentionally misled them. Lawyers for his holding companies declined to comment on whether they plan to appeal.
The case, which has generated nearly 2,000 court filings, is one of the most closely watched disputes in the art insurance market. It highlighted the difficulty of quantifying damage to high-value artworks, particularly when insurers must weigh visible destruction against claims of subtle, less tangible impairment.
