Sotheby’s New York has sued Halsey Minor for $16.8m in fees and damages for failing to pay for three works of art he successfully bid, but did not pay, for at sales in May 2008. Mr Minor is the founder of CNET Networks, a technology media company that was bought by CBS Interactive in 2008, and Minor Ventures, a venture capitalist firm.
The works in question are Edward Hicks’s Peaceable Kingdom with the Leopard of Serenity, 1846-48, Andy Warhol’s Diamond Dust Shoes, 1980, and Childe Hassam’s Paris, Winter Day, 1887. The Hicks and the Hassam were auctioned on 22 May for $9.7m and $3.9m respectively at Sotheby’s American paintings, drawings and sculpture sale in New York. The Warhol was auctioned at the same location in a contemporary art sale on 15 May for $301,000.
All three works were billed together to Mr Minor, although his reason for not paying concerns only the Hicks work. This is because its previous owner, jeweller Ralph Esmerian, bought the work in 1976, and in 2005 had pledged it to Sotheby’s as collateral for a loan with the auction house. Sotheby’s put the painting up for auction in May and Mr Minor says that they “sold a painting they essentially owned without disclosing it”.
Sotheby’s says this is not a true reflection of the situation. “Sotheby’s sole interest in this painting was a security interest, given that the painting was security for a loan Sotheby’s had made to Ralph Esmerian,” said Diana Phillips, a spokeswoman for the auction house. She says the firm “fully complied with its disclosure obligations”. She adds that it is “simply not credible that Mr Minor did not know about this particular loan” as it was reported in the media, and that he had “acknowledged that he understood this particular seller’s urgent financial circumstances to Sotheby’s long before the sale”. Mr Esmerian had been declared in default of a separate $178m loan he had taken out with Merrill Lynch.
The suit also states that although Sotheby’s usually requires immediate payment, they had “offered Minor generous payment terms”, where he had 90 days in which to pay.
Mr Minor told us he had previously bid on works in Hicks’s “Peaceable Kingdom” series at Christie’s. Sotheby’s knew of his interest and approached him about the painting they were to auction, he says. Sotheby’s denies such an approach.
Mr Minor says that when he then expressed his concerns, “Sotheby’s told me I should have done my research, but what was I paying them 15% to do?” Ms Phillips denies that Sotheby’s made this statement.
The court papers filed in New York on 2 September say “more than $13m” is owed, which Mr Minor had not paid despite “efforts” by Sotheby’s to obtain this sum from him. The damages Sotheby’s is seeking include not only the price of the works, but also interest, late fees, attorneys’ fees, and other charges. Mr Minor says he “will be responding legally” to Sotheby’s suit.