Facing Madoff Lawsuits, Merkin Sells Art Collection

Jul 1 2009 | 12:56pm ET

Buffeted by lawsuits stemming from the losses suffered by his Bernard Madoff feeder hedge funds, J. Ezra Merkin is selling his art collection.

Merkin, the former chairman of GMAC Financial Services and a longtime friend of the convicted Ponzi schemer, who this week was sentenced to 150 years in prison for his $65 billion fraud, agreed to sell his collection—as a whole—to an anonymous buyer for $310 million. Merkin’s collection includes several paintings by Mark Rothko and sculptures by Alberto Giacometti, according to a legal filing yesterday.

New York Attorney General Andrew Cuomo, one of many suing Merkin and his three Madoff feeder funds, said the proceeds from the sale will be held in escrow, pending the result of the fraud lawsuit.

“This will preserve assets that, if our litigation is successful, will provide restitution to victims of Mr. Merkin’s alleged fraud,” Cuomo said.

Merkin’s Ascot Patners, Ariel Fund and Gabriel Capital Corp. lost some $2.4 billion in the Madoff scam, and Merkin has already turned the three funds over to receivers under an agreement with Cuomo’s office. But he has maintained his innocence in the several suits filed against him, saying that he was as surprised as anyone else to discover that his friend had been running the biggest financial fraud in history.

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