THE $40-MILLION ELBOW.(The Talk of the Town)

You might have seen "Le Reve," Picasso's 1932 portrait of his mistress, Marie-Therese Walter, in your college art-history textbook. The painting is owned by Steve Wynn, the casino magnate and collector of masterpieces. He acquired it in a private sale in 2001 from an anonymous collector, who had bought it at auction in 1997 for $48.4 million. Recently, Wynn decided that he'd like to sell it, along with several other museum-quality paintings that he owns. A friend of his, the hedge-fund mogul and avid collector Steven Cohen, had coveted "Le Reve" for years, so he and Wynn and their intermediaries worked out a deal. Cohen agreed to pay a hundred and thirty-nine million dollars for it, the highest known price ever paid for a work of art.

A few weeks ago, on a Thursday, a representative of Cohen's came from California to inspect the painting. She removed it from the wall, took it out of its frame, and confirmed that it was in excellent shape. On Friday, she wrote her condition report, and so, according to their contract, the deal was done. All that was left was the actual exchange of money and art.

That weekend, Wynn had some friends visiting from New York--David and Mary Boies, Nora Ephron and Nick Pileggi, Louise Grunwald, and Barbara Walters. They were staying, as they often do, at his hotel and casino, the Wynn Las Vegas. As they had dinner together on Friday night, Wynn told them about the sale. "The girls said, 'We've got to see it tomorrow,' " Wynn recalled last week. "So I said, 'I'll be working tomorrow. Just come on up to the office.' " (He had recently moved "Le Reve" there from the hotel lobby.)

The guests came at five-thirty, and Wynn ushered them in. On the wall to his left and right were several paintings, including a Matisse, a Renoir, and "Le Reve." The other three walls were glass, looking out onto an enclosed garden. He began to tell the story of the Picasso's provenance. As he talked, he had his back to the picture. He was wearing jeans and a golf shirt. Wynn suffers from an eye disease, retinitis pigmentosa, which affects his peripheral vision and therefore, occasionally, his interaction with proximate objects, and, without realizing it, he backed up a step or two as he talked. "So then I made a gesture with my right hand," Wynn said, "and my right elbow hit the picture. It punctured the picture." There was a ...