In a rare dispute that divulges how some artworks worth extraordinary sums of money are sold, an auction house has sued the scion of a sugar fortune after he failed to pay the $14.5 million he had promised for a Jackson Pollock white-on-black drip painting.
Nobody bid on the Pollock during the live auction in November. But in an increasingly common practice, Phillips Auctioneers had previously received a financial commitment from the scion, David Mimran, as a third-party guarantor. Those agreements help auction houses lure expensive artwork by guaranteeing a sale and act as a kind of insurance policy for the seller.
Third-party guarantors agree to buy a painting or sculpture at a set minimum price if it does not sell for more at auction. If the sale goes above that price, the guarantor typically receives a percentage of the upside. That exact percentage is tailored to the agreement, which is usually confidential.
“It’s becoming a tactic that a lot of art collectors are using essentially to make some quick money,” said Mari-Claudia Jiménez, a partner and founder of Withers Art and Advisory. “If they guarantee something that they suspect is going to do very well, they can profit quite handsomely.”
A lawyer for Mr. Mimran, a film producer and the son of the sugar baron Jean-Claude Mimran, declined to comment. Luke Nikas, a lawyer representing Phillips, said in a statement, “If Mimran didn’t have a dollar to his name to pay for the artwork, as he claims, then he shouldn’t have raised a paddle.”
The untitled Pollock, which was created circa 1948 and displayed at the Museum of Modern Art in a 1998 retrospective, uses oil, enamel, pebbles and cutouts on paper mounted on Masonite. In its auction catalog, Phillips describes the 31-by-23-inch painting as “an optically dazzling composition, punctuated by cutout shapes, and emerging from an explosive period of creativity and newfound sobriety.”
The plaudits were not enough to drive the price beyond Mr. Mimran’s guarantee, obligating him to purchase the work by the middle of March, according to documents filed this month in New York State Supreme Court.
Mr. Mimran failed to make his payments by then, entering an agreement with Phillips to extend the due date to June 30. “Mimran admitted that he owed money, but he cried poverty and asked for more time,” the court documents said.
Five days before the June deadline, Mr. Mimran’s lawyer alerted Phillips via email that he would be unable to make any payments. “David has requested an additional 60 days to pay because he says that substantial assets of his in Western Africa are finally in the process of becoming accessible,” the email read.
Attempts to reach Mr. Mimran were unsuccessful, but he told Artnet that he was a little reluctant when Phillips approached him about backing the painting about two weeks before the auction. “I love Pollock and owned one before but requested my usual six-month terms as I knew I might be tight on cash in that period,” he said.
“I love the painting,” he added, “and will buy it just a little late, which happens often in this market.”
Phillips is seeking nearly $15 million from Mr. Mimran. That includes the original price for the painting as well as accrued interest. Mr. Mimran signed an affidavit in April acknowledging his debt to Phillips, but his lawyers believe it is unenforceable because of recent changes to New York law.
Mr. Nikas, the lawyer representing Phillips, said in an interview that Mr. Mimran had a pre-existing relationship with the auction house. Its vetting process was rigorous, Mr. Nikas said, and takes into account numerous factors.
“In David’s case, for example, they had done transactions before, he’s a known purchaser of significant artworks at high levels,” Mr. Nikas said. “His father’s publicly reported to be a billionaire. So you just look at all of the factors, and ultimately you weigh those depending on the circumstances.”
The case is likely months away from being resolved, but Mr. Mimran’s reputation may have already been bruised, said Ralph Lerner, an art lawyer in New York.
Mr. Lerner said a collector who reneges on a guarantee could be banned from buying at auctions. “The art world is still a word-of-mouth world,” he said. “He dug himself a hole here.”
Derrick Bryson Taylor is a Times reporter covering breaking news in culture and the arts.
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