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Sotheby’s Sale of Peaceable Kingdom Sparks Legal Battle

Sotheby’s filed a $16.8 million lawsuit against Halsey Minor, a California entrepreneur and art collector, for failure to pay for three paintings for which he successfully bid at auctions last May. Minor founded online media company CNET, which was acquired by CBS Corporation for $1.8 billion earlier this year.

NEW YORK—Sotheby’s filed a $16.8 million lawsuit against Halsey Minor, a California entrepreneur and art collector, for failure to pay for three paintings for which he successfully bid at auctions last May. Minor founded online media company CNET, which was acquired by CBS Corporation for $1.8 billion earlier this year.

The paintings at issue are Andy Warhol’s Diamond Dust Shoes, 1980, for which Minor bid $301,000 (estimate: $100,000/150,000), Childe Hassam’s Paris, Winter Day, 1887, for which he bid $3.96 million (estimate: $2.5 million/3.5 million), and Edward Hicks’s Peaceable Kingdom with the Leopard of Serenity, 1829–30. Minor won the Hicks with a $9.7 million bid, above its $6 million/8 million estimate, setting a new record both for the artist and for a work of American folk art.

The lawsuit, filed in U.S. District Court in Manhattan on Sept. 2, claims Minor is in “willful default in paying for his purchases.” Standard auction house agreements require “immediate payment” by buyers, which usually means within 30 days.

Diana Phillips, director of press and corporate affairs at Sotheby’s, told ARTnewsletter that weeks of negotiations took place between the auction house and Minor, in which Minor claimed that “he was owed money by others, and we tried to work out an arrangement to extend the period of payment,” she said. Sotheby’s allowed him until late August to make payment, but in the end, she said, “he wouldn’t pay.”

Minor, 43, told ARTnewsletter that his relationship with Sotheby’s—which began in 1999 and during which he has acquired $30 million worth of contemporary and sporting art, furniture, contemporary design and American art through the auction house—has always been predicated on his having 90 days in which to pay for his purchases. “These have always been the terms under which I bought,” he said. “I dare anyone at Sotheby’s to say that I don’t have the ability to pay.”

His refusal to pay for his purchases last May, however, is based on his assertion that the auctioneer failed to disclose its own economic interest in the Hicks painting. According to Minor, a New York art dealer told him in August that Sotheby’s had made a loan to Ralph Esmerian, the gem dealer and American folk art collector, as part of the agreement to consign The Peaceable Kingdom for public sale. Sotheby’s contends Minor was aware that the consignor was having financial problems and that the Hicks work was collateral for a loan.

Minor further claims that Dara Mitchell, head of American painting at Sotheby’s, bidding on the Hicks on his behalf constituted “a clear conflict of interest there, because she knew how much Sotheby’s was owed, but I wasn’t aware that Sotheby’s was owed anything.” Had he and others known about the loan arrangement, he told ARTnewsletter, “it might have changed what I bid, I really can’t say. But, certainly, what Sotheby’s did violates the integrity of the auction.”

New York City Department of Consumer Affairs regulations require that when auctioneers make loans or advances to consignors “this fact must be conspicuously disclosed in the auctioneer’s catalogue or printed material.” This disclosure need not be made on a lot-by-lot basis, and can be satisfied by a general statement in the auction catalogue that loans and advances are made to consignors. “We disclosed all that we needed to disclose under New York law,” Phillips said.

In addition to seeking payment, Sotheby’s lawsuit claims damages—including “interest, late fees, attorneys’ fees, handling and other charges . . . as well as damages arising out of the effect of Minor’s defaults on Sotheby’s relationship with its Consignor”—in the amount of $1 million per work. —D.G.

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