MANHATTAN (CN) — A Sotheby’s executive unveiled details about the inner world of private art sales during testimony Friday and sought to distance the renowned auction house from an art dealer’s purported price-gouging scheme.
Russian billionaire Dmitry Rybolovlev claims Sotheby’s aided and abetted Swiss art dealer Yves Bouvier in manipulating Rybolovlev into purchasing 38 works of art at significantly inflated prices, for a total of $2 billion, between 2003 and 2015.
Bouvier needed Sotheby’s “as a broker for the transactions, and as a respected authority in the art world to help him justify the fraudulent prices he charged,” said in his 2018 lawsuit. He's seeking $232.5 million in damages in the Southern District of New York trial.
After U.S. District Judge Jesse Furman, a Barack Obama appointee, dismissed the bulk of Rybolovlev’s claims, the auction house is facing trial for aiding and abetting Bouvier in manipulating the prices of four pieces of art for sale: Amedeo Modigliani’s limestone sculpture “Tête,” Rene Magritte’s “Le Domaine D’Arnheim,” Gustam Klimt’s “Wasserschlangen II” and Leonardo da Vinci’s “Salvator Mundi” painting.
During cross-examination on Friday Samuel Valette, the vice chairman for private sales worldwide at Sotheby’s, described in detail the sale process for Magritte’s “Le Domaine D’Arnheim,” a surrealist painting that depicts a window that looks out to a view of snowy mountains. In the windowsill are two eggs. In the distance, one of the mountains is shaped like an eagle.
The painting is inspired by American writer Edgar Allen Poe’s “The Domain of Arnheim,” Valette explained Friday, which describes Poe’s ideal landscape as having a “defect" or an "excess.”
“That’s also the surreal effect,” Valette said, referring to the prominence of the eggs in the painting, compared to the more obscured eagle.
“He doesn’t try to describe the reality," the art executive explained. "He decided to put shadows on the eggs… and then the shape of the eagle is quite a sort of distance in the mountains, and you discover it maybe after a second glance.”
Bouvier was interested in buying the painting, Valette said, and offered to pay $20 million for it. At the time, he added, the record for a Magritte sale at auction was $12.6 million.
Sotheby's eventually convinced the undisclosed owner, a private collector, to sell it for $25 million. However Bouvier, the art dealer, fictionalized a negotiation with the seller and resold the piece to Rybolovlev at a price nearly double the asking price.
In emails shown in court, Bouvier told Mikhail Sazonov, a financial adviser to Rybolovlev, that the seller was asking for $50 million dollars. After some negotiating, Bouvier told him, he was able to get the seller to agree to $43.5 million.
But that back-and-forth was all made up, according to Valette. “The owner wanted $25 million,” he said. “I have no idea where that came from.”
Valette was also asked about Modigliani’s “Tête,” a stone carved head sculpture.
Valette explained that Modigliani carved his sculptures directly into stone, setting him apart from artists who use plaster and cover it with stone afterward. “They’re all absolutely unique,” Valette testified Friday.
According to Valette, the stone head was owned by siblings who had inherited it from a family “patriarch” and were interested in selling — and in keeping the sale private, since they had cousins who inherited less valuable art. “They wanted to be discreet, they didn’t want to ruffle feathers,” Valette testified.
The siblings signed a contract with Sotheby’s that gave the auction house three months to sell the piece privately. Sotheby’s expected the piece to be sold for 55 million euros, roughly $60 million, and the siblings paid the auction house that much to sell it for them.
Valette tried to sell the sculpture to Bouvier, but he did not submit an offer until three months later, when the contract deadline was about to expire.
Despite Valette expecting an offer upwards of 55 million euros, Bouvier offered 31.5 million euros. When Valette brought the offer to the siblings, they agreed to sell, rather than extend the contract, to avoid anyone finding out about the sale.
A few months later, Valette learned Bouvier had re-sold Modigliani’s sculpture for 62.5 million euros to Rybolovlev.
Bouvier was not named as a defendant in the lawsuit, which was filed by Rybolovlev’s family trust Accent Delight International, but he has faced criminal charges in France, Monaco and Switzerland over the purported markups.
Bouvier has not been found guilty in any of these proceedings, however. After a confidential settlement in Geneva, the last of charges against Bouvier in the price-gouging scheme were dismissed.
As the trial against Sotheby’s continues in New York, Bouvier emphasized the previous court rulings.
“It is like a surreal charade in which people argue over a fraud that was proven to have never happened,” Bouvier said in a statement. “All past decisions around the world, including in the U.S., have unanimously concluded that I was innocent.”
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