Thick As Thieves: The Sorry Tale of How an Art Dealer Stole from Her Artist and Got Away With It

Yves Gaucher, one of his abstract paintings, and Olga Korper, below, the gallerist who betrayed him.

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IN the weeks before he was sentenced in August to a five-year prison term for bilking more than a dozen clients of $7.1-million, the Toronto stockbroker Christopher Horne was sipping a Diet Pepsi and soaking up the party atmosphere at the Morrow Avenue complex of art galleries in Toronto’s west end.

Giving him hugs and air kisses was Olga Korper, art dealer and self-described queen of Toronto’s visual-arts scene. Since moving her eponymous gallery seven years ago to 17 Morrow Ave. — far west of Yorkville, where the chic galleries are — the 56-year-old Ms. Korper with the trademark purple hair has been celebrating summer with an annual outdoor fete to which hundreds of artists, dealers and collectors are invited. It’s an invitation few pass up: Ms. Korper’s gallery houses some of the best commercial exhibitions of contemporary art in the country, and her party is the art event of the season.

But few of her guests this past July would have guessed that their elegant surroundings at Morrow Avenue — “my kingdom, my ivory tower,” as Ms. Korper still calls it — were actually in the possession of the bank. As reported in The Globe and Mail on Thursday, Ms. Korper and her partners had lost possession of the $4.5-million complex months earlier when their biggest creditor, the Toronto-Dominion Bank, seized the property for unpaid loans in excess of $3-million. (They also owed the City of Toronto $200,000 in back taxes.) Morrow Avenue is now on the market in a power of sale, with a list price of $1.6-million.

The Globe’ Deirdre Kelly has also learned that Ms. Korper was the subject of an official complaint to a national arts group launched by one of Canada’s leading abstract painters, Yves Gaucher, who was conspicuously absent from the party.

A native Montrealer, Mr. Gaucher has a total of 250 works in virtually every leading art institution across Canada. Until a few years ago, the painter, 62, was Ms. Korper’s top seller, her bread-and-butter artist. Mr. Gaucher’s complaint, to the Professional Art Dealers Association of Canada, involves business practices that Ms. Korper engaged in during the latter part of the 10 years she was his dealer, from 1984 to 1994.

Mr. Gaucher said Ms. Korper permitted a bank to cash a $200,000 letter of credit that he had given as security when she first moved into Morrow Avenue. Mr. Gaucher also said that while she was his dealer she made undisclosed sales of his paintings and did not pay him his share of the money. According to his records, she initially owed him close to $55,000 for sold works and for insurance on a damaged painting that she had collected on but had not paid him for. By the time he left her gallery in 1994, he said, what she owed him had risen to almost $100,000.

He has since asked PADAC, of which Ms. Korper is a past president, to publicly “reprimand” her because of what he terms “the seriousness of her breaches” of the association’s code of ethics. That complaint was rejected by PADAC, whose current president is Fela Grunwald of Toronto, a friend of Ms. Korper and former gallery owner who used to have a commercial space at Morrow Avenue, and by PADAC’s lawyers, who said that PADAC is “not a professional governing body operating under the authority or the sanction of the government of Ontario” and therefore has “no obligation to convene disciplinary hearings . . . or to otherwise publicize its disciplinary process.”

Ironically, Paul Cherry, a partner with chartered accountants Coopers & Lybrand and one of several Korper investors to have lost in the hundreds of thousands of dollars, said that Mr. Gaucher is, in fact, “a lucky man.”

“I think he got a better result [than any of the investors]. . . . No one who has put money into [Morrow Avenue] has seen any of their money back.” In addition to his initial investment of over $100,000, Mr. Cherry has a second mortgage on the property valued at $250,000, with interest.

ARTIST and dealer have fared differently since parting company in 1994. Mr. Gaucher has painted little, has experienced bouts of depression, and is currently in the second year of a two-year leave of absence from Montreal’s Concordia University, where he has been a teacher since 1966 and a decisive influence on such noted Canadian artists as Betty Goodwin and Jana Sterbak.

Until this year, Ms. Korper has thrived, according to all appearances, since the breakup. Four months ago she celebrated the seventh anniversary of the Olga Korper Gallery with another party. Some might think seven an odd year to honour, but for the superstitious Ms. Korper it makes perfect sense. When you meet her for the first time, she is likely to ask two things: “What’s your sign?” and “Do you believe in reincarnation?” She delights in her 32-year-old daughter Sasha’s conviction that she chose Ms. Korper to be her mother from the beyond. And seven is a magical number. “It just feels lucky to me,” she said.

The first of five daughters born to Austrian parents in Czechoslovakia in 1940, Ms. Korper immigrated to Canada with her family in 1951, settling in Toronto. A graduate of the Ontario College of Art with a background in graphic design, Ms. Korper’s first marriage was to engineer Luba Mraz, with whom she had her only child. While honeymooning in Europe with husband No. 2, businessman George Korper, she realized she was intensely unhappy and wanted to do something better with her life. For her, better meant art dealing.

Breaking off the relationship shortly after the honeymoon, she returned quickly to Toronto and in 1973 opened her first venture in a rented basement apartment in trendy Mirvish Village. “It was ridiculous,” she said recently, her raspy smoker’s voice adding a brassy Mae West glamour. “I didn’t know my elbow from my ass.”

Her ambitions were big and she soon outgrew Gallery O. In 1982, she moved to a loft-like warehouse space at 80 Spadina Ave., in the heart of Toronto’s garment district. Two years later, Mr. Gaucher, who was then without a Toronto dealer (he had previously shown with Mira Godard), asked her to be his Toronto dealer. They clicked, as Ms. Korper predicted they would. “I remember she said we would be lucky for each other,” Mr. Gaucher recalled.

Her stature in the art community grew with Mr. Gaucher under her wing. With this shift of fortune, she went from being a small player to one of the biggest in Canada.

An artist whose unsettling geometric shapes, hard-edged surfaces and modulated palette are an acquired taste, Mr. Gaucher commanded as much as $90,000 a canvas during his 10-year tenure with Ms. Korper. Christopher Horne was an especially avid collector, owning at least a dozen Gauchers and building a private collection of art valued at $4.5-million before he was sent to jail for fraud this past summer.

Mr. Horne was but one patron buying Gauchers from Ms. Korper. Other clients included Toronto blue-chip law firms Tory, Tory, Deslauriers & Binnington and McMillan Binch, Concordia Art Gallery in Montreal, the National Gallery of Canada and the Royal Bank.

Mr. Gaucher prospered, and so did Ms. Korper, who toward the end of their relationship was commanding a 50-per-cent commission — standard in the art world for works on consignment by living artists — on every Gaucher she sold. In one year at 80 Spadina, Ms. Korper says, she grossed about $1-million, much of it on Mr. Gaucher. When, in 1988, she decided it was time to leave Spadina, she enlisted some of her powerful followers to help back an ambitious dream of an art empire.

Ronald G. Macdonald, at the time a lawyer at Tory, Tory and, like Ms. Korper, a bridge enthusiast, told her about a clump of dilapidated buildings for sale near the railway tracks in the city’s west end. At first Ms. Korper thought he was crazy; Morrow Avenue is situated in an area known more for selling discounted lumber than high-ticket art. But when she saw it, she fell in love. “It reminded me of Tuscany,” she said, probably referring to its vast walls of pale-ochre brick.

To buy Morrow Avenue, vacant since 1986, she looked for investors to help cover the $4.5-million needed. When she called on Mr. Horne, he gave her $300,000 and eventually became one of seven investors who established themselves in 1988 as the Morrow Avenue Limited Partnership. The others were Mr. Macdonald, Mr. Cherry, Tory, Tory lawyers Ross Kennedy and James Tory, Toronto businessman George Brady and Niagara-on the-Lake graphic designer Kathleen Wittick (Ms. Korper’s friend from her art-college days). Each chipped in between $50,000 and $300,000 to get her started. Ed Mirvish, Ms. Korper’s former landlord when she was a novice dealer, extended her a loan of $200,000 (with an annual interest set at 15 per cent.)

Ms. Korper cherishes the generosity of her friends; it’s why she annually fetes them at Morrow Avenue. “Some of them were unwilling,” she told Robert Fulford in a 1994 Canadian Art magazine interview. “They sort of said, ‘I’ll give you this money, try not to lose it.’ My partners should go down in history as supporting culture. It has not been an easy ride for them.” (Toronto dealer Mira Godard refused to give her a loan.)

Yves Gaucher could argue that he has had the uneasiest ride of them all. In September, 1988, Ms. Korper asked Mr. Gaucher for a $200,000 letter of credit to be used as security until she was able to get Morrow Avenue at least 60-per-cent rented. (A letter of credit is a form of security that guarantees repayment of a bank debt; a line of credit is a loan arrangement with the bank that permits borrowing up to a given limit.) Ms. Korper gave Mr. Gaucher her guarantee in a letter written to him on gallery letterhead that the credit letter would never be used “under any circumstances as a demand for cash.” In the same letter, dated Sept. 12, 1988, Ms. Korper also wrote that “Mr. Christopher Horne is supplying his personal guarantee to you also.” Mr. Gaucher said that to emphasize this, Mr. Horne called him in Montreal. “He gave me a verbal guarantee on the phone and was supposed to send it in writing very shortly afterwards but I never got it.” According to Mr. Gaucher, Mr. Horne also told the artist that should anything go wrong, he would personally reimburse the $200,000.

Mr. Gaucher said he thought the deal was airtight — “otherwise I never would have done it.” He was also motivated to help Ms. Korper because by that time he had come to view her and her gallery as extensions of himself. “I knew I was a key factor in making her gallery one of the top galleries in Canada and she was responsible for bringing me back into the gallery scene in Toronto. It was also my gallery in a sense, my place of business. . . .”

“That was a remarkable decision for Yves to make,” said Aaron Milrad, a Toronto lawyer who has specialized in arts and media law for 35 years and who represents Mr. Gaucher. “It’s not artists who come to the rescue of galleries, it’s the reverse. It’s the galleries that normally come up with monthly advances or funds to help an artist buy canvas or paint or pay off a debt or pay some rent.”

In purchasing Morrow Avenue, Ms. Korper and her partners eventually negotiated two bank loans, including the TD Bank loan of $2.9-million that cost her Morrow Avenue.

By October, 1989, a year after moving into her new digs, the Morrow Avenue complex was 80-per-cent rented, but Ms. Korper still needed to sell $1-million worth of art a year — after commission — to keep her gallery afloat, including rent, exhibition costs, shipping, advertising and accumulated debts. In 1990 recession struck Central Canada and the market for contemporary Canadian art started to collapse.

From 1989 through most of 1992, Mr. Gaucher continued to renew his letter of credit every six months, at her request. But finally, in August, 1992, he decided it was time to terminate the commitment: “I thought it had gone on for sufficient time.”

That same month he left Canada for a vacation in Hawaii with his wife of 32 years, Germaine. When he returned two weeks later, he discovered that $200,000 had been withdrawn from his Montreal bank account by the Toronto-Dominion Bank the day before Mr. Gaucher would have officially terminated his agreement. “I was extremely upset,” Mr. Gaucher said. “This was my retirement money.”

Unbeknownst to Mr. Gaucher, in August of 1992 Ms. Korper had a crisis on her hands. The TD Bank informed Mr. Gaucher’s home branch of the Bank of Montreal that it wished to draw on Mr. Gaucher’s $200,000 letter of credit because of financial problems at Morrow Avenue.

Ms. Korper, in a recent interview, called the bank’s cashing of the letter an unfortunate occurrence. “Oh, that was a really unhappy thing, you know. And it was predominantly my fault. I got myself into a financial situation that wasn’t very happy and Yves lost some money as a result of it. What can I do other than apologize and grovel?”

She made an effort to pay Mr. Gaucher back. “She told me at the very first that Christopher Horne was going to pay me back and that Christopher would send me a cheque for $60,000 right away and another $40,000 very shortly after and they would find a solution very fast for the other $100,000,” Mr. Gaucher said. “So I got the first $60,000 from Horne, but he never came up with the $40,000. I eventually got that from Olga herself.” Ms. Korper got the money by selling a Gaucher painting that belonged to her.

By early 1993, Ms. Korper and her partners were unable to make their loan payments. The Morrow Avenue Limited Partnership wanted to allow the business to go bankrupt in the expectation that they would be able to buy it back from the TD Bank at a discounted price. In a letter to Mr. Gaucher dated Feb. 25, 1995, Ms. Korper outlined the partnership’s intended strategy: “It has been clear that for at least two years that the most profitable route would be to allow the Bank to take the property and attempt to sell it, and that we subsequently regroup and buy it back at a fraction of our current debt. To the great consternation of a number of our partners, we have chosen to keep the partnership intact and pay all our debts in full.”

(Now that the complex has fallen to the bank, the partnership or Ms. Korper herself could conceivably purchase it back. Ms. Korper, in an interview this week, said she is trying to put together an offer. She has approached some of the tenants at Morrow Avenue to help her out.)

By February, 1995, in Toronto’s depressed real-estate market, Morrow Avenue’s worth had shrunk to an appraised value of $1.4-million. Meanwhile, Ms. Korper and her associates were continuing to pay servicing fees on its prerecesssion value of $4.5-million. She struck a deal with Mr. Gaucher to repay the $100,000 she still owed him at a rate of 25 cents on the dollar. By accepting the deal he took a $75,000 loss, and it took three years to pay him. “I didn’t see any move towards anything concrete being done about repaying me,” Mr. Gaucher explained. “And I became very nervous. Because I knew if they were going down I’d never see any part of my money. They had more important creditors than me.”

A review of his own records in April of 1993 revealed to Mr. Gaucher that Ms. Korper may not have reported all sales of his work. But as a self-described “lousy” businessman, Mr. Gaucher at first did not react to these discrepancies: In the art business, it’s not uncommon for a dealer to hold back money for a time from an artist. Nevertheless, Mr. Gaucher and Ms. Korper had an oral agreement that required her to pay him within 30 days of each sale, and in June Mr. Gaucher decided to go to Toronto.

Confronted by Mr. Gaucher during a restaurant meeting in Toronto, Ms. Korper acknowledged that Mr. Gaucher was right in his claims — she had sold works without disclosing those sales to him and had not paid him his share of the proceeds. She disputed nothing. Mr. Gaucher said she tearfully asked for forgiveness, promising never to do what she had done to him again and saying she would pay him back everything she owed him for the sold paintings. Mr. Gaucher gave her a second chance and even committed to another show at her gallery.

Mr. Gaucher continued to feel bound to her: “Her success was my success.” Also, Ms. Korper had argued that if he took all his paintings away from her she would no longer have the means to repay him.

A new Gaucher show was scheduled for Morrow Avenue in the fall of 1993. But the artist made this exhibition conditional on Ms. Korper signing a document that he had drawn up independent of his lawyer. “It stated the amount of arrears that she owed me, and a mode of repayment that she was to give me 100 per cent of all subsequent sales . . . until all her debt was cleared,” Mr. Gaucher said. Ms. Korper signed, and Mr. Gaucher gave her 20 paintings.

A little more than half of the November, 1993, show was sold — “enough for her to pay me back everything she owed me [for the art],” according to Mr. Gaucher. But the payment was never received, and sales of his work continued without their being reported to him.

In September of 1994, Mr. Gaucher asked that his unsold paintings at the Korper gallery be returned to him. He approached independent Toronto art consultant Christopher Birt to assist him in drawing up an inventory. After the inventory was completed, Mr. Gaucher discovered approximately 11 more unreported sales of work that were unaccounted for in previous sales statements.

Mr. Gaucher felt he had no alternative but to break off relations with Ms. Korper, and in October of 1994 he quit her gallery. “I was sorry that he left me,” Ms. Korper said. “We had 10 very happy years together.”

With $100,000 still owing on the credit letter (the deal for 25 cents on the dollar had not yet been negotiated) and now another $100,000 owing on non-reimbursals for sales of art, Mr. Gaucher consulted another lawyer.

“When I got a call from a lawyer I was so surprised I almost fell off my stool,” Ms. Korper said in an interview last August, shedding tears at the memory. “I could not believe that he [Mr. Gaucher] didn’t feel he could settle something with me personally. So I found that incredibly painful. I was heartbroken.”

When she learned that Mr. Gaucher was considering legal action against her, Ms. Korper immediately recommenced a slow process of repayment for the unreported sales, giving him close to $100,000 in cheques, some of them postdated, from 1993 through to March of 1997. To date, all her cheques to Mr. Gaucher have been good.

Looking back over the recent past, Ms. Korper said she has no regrets. Mr. Gaucher “received money for everything that was ever sold,” she declared. “He actually did get money for all the sales to the last penny. Some of it took longer than it should have. That’s very true.” (For his part, Mr. Gaucher says that he is still out of pocket for lawyer’s fees, lost income and other expenses incurred trying to get Ms. Korper to honour her debt to him, exclusive of the $75,000 lost on the $200,000 credit letter.)

MS. Korper is not the first dealer to run into controversy over his or her relationship with artists. A milestone case involved the late artist Mark Rothko and his dealer Frank Lloyd of New York’s Marlborough Gallery. After Mr. Rothko’s suicide in 1970, his daughter Kate successfully sued Mr. Lloyd and four executors of her father’s estate of 800 paintings after discovering they were selling the work at terms favourable to themselves; she won a $9.2-million (U.S) judgment.

Artists depend on a dealer’s ability to do business. They are often loath to speak openly about any disputes for fear of alienating themselves within the community, especially one as small and interconnected as the one in Canada.

Artists “don’t want to get a reputation for being a troublemaker,” said Elizabeth Legge, a professor of contemporary art history at the University of Toronto. “It’s a very narrow saucer in which they live, and that commentary can have a tidal-wave effect coming back at them.”

Mr. Gaucher has yet to get some members of the Canadian art community, especially PADAC, to take seriously his complaints against Ms. Korper. However, Ms. Korper said that “if he feels that I need additional punishment, I would deny that. I don’t need any additional aggravation. And the people he tried to convince I needed additional punishment agreed with me. So that’s that. Now go away. You signed. You settled. It’s enough. That’s that.”

Mr. Gaucher has since developed a reputation among some dealers as a troublemaker. He has even been cautioned by Ms. Korper’s lawyers about the slanderous potential of some of the remarks he has made about her.

“Yves was very busy trying to get an audience for his complaints . . . and didn’t get very far. And probably,” Ms. Korper said, “it was because he had really put me on too high a pedestal to begin with. So he was reminded of things he had said earlier, and in the end it was hard to know which [version of me] to believe. I think the answer is neither.”

TODAY, Mr. Gaucher is working again. Two months ago he attended an exhibition of his print work, past and present, at Montreal’s Simon Blais Gallery, which proprietor Simon Blais said was a great success. “We sold well, we opened new markets . . . and I am very happy because for me Yves Gaucher is one of the top five Canadian artists living today . . . and he deserves continued recognition.”

Ms. Korper, meanwhile, recently enlisted another big-name Canadian artist — Paterson Ewen — and the opening of a show of new work by the internationally acclaimed artist at her gallery on Sept. 28 was cause for much celebration.

Along with Mr. Gaucher, the 71-year-old Mr. Ewen is one of the grand old men of Canadian abstract art. Indeed, he’s never been hotter: Last month Toronto’s Art Gallery of Ontario unveiled a long-running retrospective show of his work. In the fall he joined Ms. Korper’s gallery for a show that closed at Morrow Avenue on Oct. 19.

“Paterson heard about my problem with Yves Gaucher and asked me about that,” Ms. Korper said. “He was very interested in what happened. And I told him the story. And didn’t deny that I have had some tough financial times with the building. And that I would like him to come with me and that I thought he would be very lucky for me. To which Paterson said, ‘I think we will be lucky for each other.’ His show happens to fall on my seventh anniversary. . . . I chose to look at that as a really positive sign.”

Author’s note: Since the printing of this article in 1996, the artist Yves Gaucher died of throat cancer on Sept. 8, 2000.  Olga Korper, in the other hand, has prospered.  Private backers, some of them clients,shored up her ailing Morrow Ave. gallery complex. She continues to work as an art dealer today.