Firm Secures Key Win in New York Supreme Court in Art Gallery Dispute

May 15, 2025 – On behalf of the founding members of downtown New York art gallery CANADA, Hughes Hubbard defeated a petition for dissolution of the gallery pursuant to New York LLC Law § 702 brought by a disgruntled investor with a 50% ownership interest in the gallery.

Opened in 1999 in Lower Manhattan, CANADA became a limited liability company under New York law the following year. Since its formation, the four founding members – three of whom are artists themselves – grew CANADA's stable of artists, mounted critically acclaimed exhibitions, generated art sales and contributed to New York City's culture, as they had set out to do. Today, the gallery is known for its roster of acclaimed artists, including Joan Snyder, Joe Bradley, Katherine Bernhardt and Katherine Bradford, with distinctive gallery spaces in TriBeCa, home to one of New York's most vibrant contemporary art scenes.

In late September 2008, the global financial crisis paralyzed the international art market. With the collapse of the market, the gallery needed a substantial cash infusion to survive. Around that time, the founding members were introduced to Jean Lignel, a wealthy French art collector then living in New York, who was looking to break into the local art scene. The parties agreed that Lignel would make a $150,000 capital contribution in exchange for which he would become a 50% owner of CANADA.

After Lignel became a member of CANADA, the founding members continued their work of actively running the gallery's day-to-day operations. By contrast, from the time of his investment sixteen years ago, Lignel never took an active role – or expressed any genuine interest – in helping to manage the gallery or its operations. In the few instances over the last nearly two decades that Lignel appeared or participated, he acted purely in his own self-interest. He also became increasingly hostile toward CANADA's founding members over the years, refusing to cooperate and interfering with their efforts to run the gallery.

In February 2025, Lignel's hostility toward the founding members culminated in his initiation of two lawsuits against them in the New York State Supreme Court's Commercial Division – a petition for dissolution of the gallery pursuant to New York LLC Law § 702 and a derivative action on behalf of the gallery seeking to claw back approximately $3 million in payments made to the founding members over the past six years for their services running the gallery's operations.

On May 15, Justice Anar Rathod Patel denied Lignel's request to dissolve the gallery, finding he had not provided any evidence or allegation under New York law that the gallery could no longer operate in line with its operating agreement.

Meaghan Gragg leads the Hughes Hubbard team, which includes Dan Weiner and Persis Moore.