If you wondered, as we did, why Christie’s Jean-Michel Basquiat painting “Museum Security” was withdrawn from the sale, your answer lies in the Daily News. The painting became part of a title dispute. In the process, the suit reveals some interesting details about the way third-party guarantees are structured and how some sellers just can’t accept the way a market works:
The highbrow brouhaha was set in motion in September 2011 when Churchill-Spencer sold the painting to the Mugrabi family firm, Jombihis Corporation, for $6.125 million.
Shortly afterward, the Mugrabis struck a deal with a third party to sell the Brooklyn-born Basquiat’s work at auction.
Christie’s estimated that the 1983 painting, titled “Museum Security (Broadway Meltdown),” would go for anywhere from $9-$12 million.
The Mugrabis’ buyer guaranteed that he would purchase the painting for at least $8.7 million — but if it sold for more at the auction, the profit would be split with the Mugrabis.
But an enraged Spencer-Churchill intervened, saying he was duped in his original deal with the Mugrabis.
According to the suit filed in Manhattan Supreme Court, Jose Mugrabi’s son, Alberto, tried to buy the painting from Spencer-Churchill for $5.5 million in early 2011.
Spencer-Churchill, whose father is a distant cousin of the legendary British leader, refused. He was so incensed by the offer he instructed his dealer to sell the painting for no less than $6 million to anyone but a member of the Mugrabi family.
The unidentified dealer ended up selling the painting to the Jombijis Corp. for $6 million — plus a commission of $125,000 and a bonus of one piece of art and an antique from the Mugrabi family collection, the suit says.