Merkin’s Art Adviser Bought Expensive Rothkos, Lost Millions

By Lindsay Pollock
Jan. 8 (Bloomberg) -- J. Ezra Merkin, the New York financier tied to Bernard Madoff’s alleged $50 billion Ponzi scheme, is hearing from collectors interested in buying his dozen $150 million Mark Rothko paintings, the world’s largest private grouping, according to his art adviser.

Though the paintings aren’t for sale now, “everything has a price,” said Ben Heller, 83, who helped Merkin buy the abstract expressionist paintings during the past five years.

“I am flooded with phone calls,” said Heller, the stepfather of actress Kyra Sedgwick who was himself a Madoff victim.

The Rothkos, housed in Merkin’s Park Avenue duplex, include two 9-by-15-foot studies for murals that Rothko executed for the Four Seasons restaurant in the Seagram Building and Houston’s Rothko Chapel, and a third, smaller study for a Harvard University mural. The Four Seasons mural paintings are in the National Gallery in Washington.

Merkin’s Ascot Partners LP lost $1.8 billion from investments with Madoff, according to lawsuits. A second fund, the $1.5 billion Gabriel Capital LP, which also invested with Madoff, was closed last month.

Heller said he invested most of his personal and charitable funds with Madoff, including a charitable trust that lost $3.4 million and more than $10 million in personal investments that he planned to give to his six children and eight grandchildren. Sedgwick also reportedly lost investments with Madoff along with her husband, actor Kevin Bacon, according to media reports.

Lost a Ton

“I lost a ton,” said Heller. “We are all devastated. It’s painful financially and painful personally.”

Dealers estimate the collection is valued at about $150 million to $200 million. Merkin, 55, declined to comment or allow a Bloomberg News reporter to view the collection.

“The impact is overwhelming,” said London-based critic and Rothko authority David Anfam, who has visited the home that Merkin shares with his wife, Lauren. “Many of them are large and it achieves exactly what Rothko wanted, which was to defeat the wall. The paintings at the Merkins’ make the walls dissolve. They become the environment.”

Other art world figures have trekked to the apartment, including Museum of Modern Art chief curator Ann Temkin and Sotheby’s contemporary art honcho Tobias Meyer.

On Dec. 10, the evening before Madoff was arrested, the Merkins hosted a gathering for patrons of the American Friends of the Israel Museum in their home.

Rockefeller’s Rothko

Rothko, who committed suicide in 1970, painted large abstract canvases, usually with three or four vibrating horizontal bands of color. A bright-hued 1950 canvas owned by David Rockefeller, “White Center (Yellow, Pink and Lavender on Rose)” sold for $72.8 million at Sotheby’s in New York in 2007.

The Merkin’s collection was assembled between 2003 and 2008. Seven came directly from the artist’s estate and heirs, according to Heller. New York’s PaceWildenstein gallery represents the Rothko estate. Arne Glimcher, the gallery’s founder and director, declined to comment.

“If you go up to that apartment, you would drop your socks,” said Heller, who assisted the Merkins in creating an environment to complement the Rothkos, with subdued rugs, furnishings and dim lighting. “It’s much closer to a chapel.”

Heller also bought on behalf of the Merkins at auction, procuring Rothko’s radiant royal blue 1968 oil on paper mounted on canvas for $7.9 million at Sotheby’s in New York on Nov. 14, nearly double the $4.5 million high estimate.

The Merkins were among sponsors of a Rothko exhibition held in 2007 at the Tel Aviv Museum of Art in Israel.

Heller, an early Rothko friend and collector, came up with the idea to amass the Rothkos.

“It was my conception,” said Heller, who guided the Merkins in their art education. “I helped them learn about art and culture.”