The lawsuit was filed in court in New York a month ago, on June 9, but the details of the case appeared in the media only this week. So, according to the materials of the case, JN Contemporary Art LLC, in which Joe Nahmad works, intends to receive at least $ 7 million compensation from the auction house for the guarantee for Phillips’s revoked painting by Rudolf Stingel. The guarantee was 5 million dollars. The canvas was to be put up for auction in the spring of this year. The guarantee was provided by the auction house subject to Nahmad placed an irrevocable bid of $ 3 million for one of the works of Jean-Michel Basquiat, which was sold at the Phillips evening auction in June 2019. The bid was made. But, it was overbought by another bidder, who eventually got the painting.
The auction house stated that the warranty was revoked due to the changed working conditions in connection with the pandemic, that is, for reasons beyond its control. However, the plaintiff’s side claims that Phillips uses the coronavirus crisis as an excuse to not fulfill its part of the deal with impunity.
However, the auction house has enough reasons to withdraw the guarantee. At the signing of the guarantee agreement of $ 5 million for Stingel’s work, such an assessment seemed quite fair. In 2018, a similar work of his authorship was sold at Sotheby’s for $ 6.5 million. However, the market situation has changed a lot. And not just because of the pandemic. The greatest damage to the Stingel market was caused by the investigation of the high-profile case of art dealer Inigo Filbrick, who sold the works of this artist and was recently arrested by the FBI for fraud.
In addition to accusations of non-compliance with the agreement, the lawsuit of JN Contemporary Art LLC also contains a very confusing claim about the conditions of the sale of Basquiat, in which Nahmad participated as a guarantor of the price. According to the case file, the owner of the work could be the proprietor of the parent company Phillips Russian businessman Leonid Fridland.
The prospects for the lawsuit are not yet clear. The prosecution does not take into account information about possible changes in the conditions for the sale of Stingel’s work, which Leonid Friedland personally transmitted to Nahmad via the WhatsApp messenger, since, according to the plaintiff, this means of communication is not a legally recognized method of communication. The disclosure of the details of the lawsuit provides everyone with a unique opportunity to be in the backstage of the art market and see the mechanism of speculative pricing and guaranteed prices and rates in action.
