Former Knoedler Gallery president and director Ann Freedman has reached a settlement over the sale of a fake Mark Rothko painting just one day before she was due to take the stand in the De Sole fraud trial.

The trial had been underway for a fortnight and Freedman’s testimony was hotly anticipated but the New York Times reported that a settlement was negotiated on Sunday (7 February). 

Chairman of Sotheby’s Board of Directors, Domenico de Sole and wife Eleanore were seeking $25 million (£17 million) in damages over the sale of a counterfeit Mark Rothko painting they purchased from Knoedler in 2004. They argued that Freedman knowingly sold them a fake work or otherwise ignored obvious red flags which would have indicated fraud.

Freedman has maintained her innocence throughout the dispute. She claims she had no idea the counterfeit was the work of a Chinese artist, Pei-Shen Qian, who created forgeries in his garage in Queens for Long Island Art dealer Glafira Rosales. Both Qian and Rosales have been charged but have fled the USA.

The De Sole’s claim is one of ten brought against Freedman over the sale of forged Abstract Expressionist artworks by Knoedler between 1994-2009. It is the sixth to have reached settlement while four more claims are outstanding. Accusations of fraud led Knoedler to abruptly shut shop in 2011.

The federal court in Manhattan heard two weeks of testimony before the parties reached a settlement. Art experts told the court that they never endorsed the fake works as authentic, contrary to what Freedman had suggested.

The New York Times reported that one of the most remarkable aspects of the case was the way in which the art market had unquestioningly embraced the fake works despite the glaring absence of verifiable provenance.

A lawyer for Freedman told the New York Times that the gallerist was pleased with the outcome and that she “never wanted to keep a penny of the profits she made” from selling forgeries. The De Sole’s lawyer has reserved comment.

The De Sole’s claim against Knoedler Gallery and its parent company 8-31 Holdings will continue in the US District Court in Lower Manhattan.