Responding for the primary time to one of many explosive lawsuits introduced in opposition to artwork advisory Lisa Schiff, her lawyer John Cahill has revealed in court docket filings that Schiff is cooperating with federal and state authorities investigating her enterprise dealings, and has been working to liquidate her advisory agency to pay collectors. Court docket paperwork additionally reveal Schiff is now not in a position to afford the “lavish life-style” she was accused of by her former shopper and buddy Candace Barasch, together with the $25,000 lease on her Manhattan residence, and she or he has exhausted her financial savings, dipping into retirement funds to pay for her residing prices and authorized charges.
Cahill’s movement, filed on 6 June, is in response to collector Barasch’s second lawsuit in opposition to Schiff. It asks the court docket to remain the present civil proceedings and deny the plaintiff’s request for a short lived restraining order and expedited discovery, in order that Schiff can proceed to work with authorities investigating her now defunct advisory enterprise. “To interact and permit different counsel to interact with legislation enforcement our bodies, in addition to ancillary companies for expertise and specialised accounting companies, Lisa rapidly exhausted her financial savings and is now counting on tax-consequential drawdowns of retirement financial savings,” Cahill writes. “With out the power to make use of these and different property, Lisa and the Firm shall be unable to safe companies and, if wanted, a protection, by the attorneys of their selections.”
Cahill, who has been representing Schiff professional bono based on the court docket paperwork, provides that earlier than any legislation enforcement began investigating Schiff, she voluntarily self-reported her monetary circumstances to the New York County District Legal professional’s Workplace. The lawyer famous, nevertheless, that “whether or not the conduct surrounding Defendants’ monetary predicament rises to the extent of prison conduct that would be the topic of potential prosecution stays to be seen.”
The filings additionally affirm that Schiff has began liquidating her enterprise, after admitting to Barasch and different shoppers that she was unable to pay what was owed to them. “The Firm has assigned all of its property to an Assignee for the Advantage of Collectors (together with Plaintiffs),” Cahill writes, referring to an alternative choice to chapter proceedings. “The Assignee has been lively and diligent in gathering the property of the Firm and has engaged one of many most-respected artwork advisory companies on this planet to advise on the sale of the Firm’s paintings property and associated logistics.”
In response to the court docket paperwork, Schiff is now not in a position to pay the lease on her residence. “After her son finishes the varsity 12 months, she’s going to search to maneuver elsewhere,” Cahill writes. “Given the media consideration to her and this matter, Lisa is discovering it tough to acquire new employment and medical insurance.” And whereas Schiff personally owns “some works of effective artwork, furnishings, jewellery, and different instances of worth”, the filings notice, “few of her private gadgets are simply liquidated or have values past the tens of 1000’s of {dollars}.”
Cahill’s movement additionally denies the allegation made by Barasch that Schiff was working a Ponzi scheme. “Though quite a lot of the Firm’s shoppers and distributors are owed cash as a result of … bills and flawed fee practices left the Firm with extra fee obligations than funds,” Cahill writes, over its 20-year relationship with the collector, Schiff’s advisory “re-sold for Plaintiffs roughly 100 artworks and generated a internet revenue for Plaintiffs of greater than $10,000,000 merely on these re-sold artworks alone.”
Neither Cahill nor Barasch’s attorneys responded to our requests for additional remark on the time of publication.
