Sperone Westwater parties propose referee as Westwater seeks dismissal of lawsuit
A February court filing says the co-owners have agreed in principle to appoint a neutral third party.
Law and Crime
The legal fight over the breakup of Sperone Westwater advanced this month, as the parties proposed a neutral referee and co-founder Angela Westwater moved to dismiss the lawsuit.
Sandstown Trade, the corporate shareholder representing co-founder Gian Enzo Sperone’s half of the gallery business, submitted a letter to New York Supreme Court Justice Andrea Masley on February 12, writing that the two sides “agreed in principle” to work with a neutral referee in the case.
The letter states that the referee’s authority is “in process but not yet agreed.” Under New York practice, a referee may be asked to decide specific disputes instead of the judge, and depending on the parties’ agreement, that decision can be binding.
In earlier correspondence filed in the case, lawyers for Westwater wrote, “We have no understanding of the disputes you think need to be resolved by such a referee. Please provide us with a list of each dispute that you believe requires this step,” reflecting disagreement over what disputes, if any, would be submitted to a referee.
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Court Documents: Sperone Westwater Dissolution Case
Records released from New York Supreme Court
Adam Schrader
The letter came days after Westwater filed a memorandum asking the court to throw out the pending dissolution proceeding. In that filing, she argued that the gallery’s shutdown and wind-down are already underway under a private agreement.
“As Petitioner concedes, ‘the only material issue[s]’ in this case are ‘how the Corporation should be wound down and who should oversee [the] winding-down process,’” Westwater’s filing states.
She contends the parties signed a binding term sheet in November laying out how to sell the company’s building, divide artworks and resolve financial issues, writing that “the term sheet is a signed, binding contract that sets out in detail the process for how the corporation will be wound down.”
The November 14 term sheet, which covers the sale of the "Foster Building" and the division of corporate-owned artworks, provides that disputes “shall be resolved by first mediating the dispute with David Geronemus” and, if the parties do not reach agreement, presented “to a referee mutually agreed in writing whose decision will be final.”
Westwater also opposed the appointment of a receiver to take control of the corporation’s assets.
The case began last August when Sandstown Trade, which holds half the voting shares of Sperone Westwater, and co-founder Gian Enzo Sperone filed a verified petition seeking to dissolve the corporation under New York law. In that petition, they described a deep split between the two equal owners.
The petition alleged that the two directors are “so divided—they do not even speak directly to one another, much less meet, and have diametrically opposed views respecting the management of the corporation and its significant assets that neither a meeting of the board, much less the votes required for action by the board, can be obtained.”
The petition sought judicial dissolution of the gallery and for related relief, including the appointment of a receiver, a court-supervised outsider who would take control of the company’s assets.
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