Settlement Reached in Collectors’ Secret-Buyer Lawsuit

A lawsuit involving warring allegations between two collectors over a behind-the-scenes $700,000 sale of a Cecily Brown painting has been settled.

In a lawsuit filed in March 2021 in a Miami-Dade County circuit court, and detailed in a recent report from Bloomberg, collector Michael Xufu Huang alleged that Federico Castro Debernardi violated the terms of a sales agreement involving the Brown painting. Accusing Debernardi of “reputational damages,” Huang was seeking $1.3 million.

Listen beautiful relax classics on our Youtube channel.

On Wednesday, Wendy J. Lindstrom, a lawyer for Huang, told ARTnews that the two collectors had agreed to settle the suit. “This matter resulted from a misunderstanding, but they look forward to collaborating again in the future,” she said in a statement. Lindstrom declined to state the terms of the settlement, which has not yet been filed. A representative for Luke Nikas, Debernardi’s lawyer, confirmed that the settlement was in the works but declined to comment further.

According to exhibits filed with the lawsuit, Huang and Debernardi entered into a deal involving the Brown painting in 2019. Other exhibits filed during the legal proceedings show that there had also been agreements between Huang and Debernardi to help purchase works by Harold Ancart and Nicolas Party. Per the terms of these agreements, Huang was to purchase certain works and then sell them to Debernardi, who was forbidden to sell the pieces again within a three-year span and who was made to keep secret Huang’s identity as the buyer in exchange for a 10 percent commission fee.

Huang, whose X Museum in Beijing opened in 2020, is a regular presence at international art fairs and other significant art events and has amassed a collection of cutting-edge art by emerging artists including Lu Yang, Amalia Ulman, Gillian Wearing, and Austin Lee. “Everywhere I go in the world, I run into Michael participating in panels and professional art events,” Lisa Phillips, director of the New Museum, where Huang is a member of the International Leadership Council, told ARTnews in 2017.

Like Huang, Debernardi has been considered a rising star within the art world in recent years. In 2017, Apollo put him on a “40 Under 40 Global” list, and last year he appeared on a “Next Gen Art Collectors” list put together by Larry’s List. In 2016, he launched Fundación Arte, which Debernardi has said he wants to use to bolster the reputation of the art scene in Argentina, where he was born.

Huang told Bloomberg, which first reported news of the suit on Wednesday, that he was trying to do Debernardi a “favor” by harnessing his clout to gain Debernardi access to works. “I thus have far greater access to artists and galleries than Mr. Debernardi, who is unable to purchase artworks from them on his own,” Huang said in an affidavit.

Based on the exhibits, Huang appears to have purchased Brown’s 2019 painting Faeriefeller from Paula Cooper Gallery during that year’s edition of Art Basel Miami Beach. Huang billed Debernardi $700,000 for the artwork, as well as an additional $70,000 commission fee and $3,700 intended to finance his travel to the fair from China.

The trouble allegedly began when Paula Cooper Gallery emailed Huang, saying that the gallery had heard from Lévy Gorvy, which had been a part of a recent transaction involving Faeriefeller. In a texting conversation entered as an exhibit, Huang messages Debernardi saying, “Like I have always been on your side and now you are putting me on the front line for all this drama.” Debernardi responds, “Stop the drama.”

In another filing, Nikas hit back at Huang, whom he called a “flipper.” Nikas was seeking to move the case to Monaco, where Debernardi is based.

“[Huang] immediately ‘flips’ the artworks for his own profit by selling them to undisclosed third-party collectors, whom he forces to accept even more restrictive anti-competitive terms if they want access to the works, all to conceal and perpetuate his wrongful scheme,” Nikas wrote. “And when his own wrongful conduct is revealed, he tries to pass the losses from his wrongful conduct on to the collectors he manipulated into agreeing to his illegal anti-competitive terms in the first place. That is what this case is about. Plaintiff deserves no sympathy or recourse from this Court.”


No votes yet.
Please wait...