Art Market Monitor

Global Coverage ~ Unique Analysis

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  August 16, 2017

   

  Richter, Bacon Caught Up in Chinese Bidder Default

  

  A Chinese art collector, Zhang Chang, placed an irrevocable bid on Gerhard Richter's Dusenjager at Phillips for $24m in November of 2016. Phillips' terms on the sale gave Zhang a $1.5m fee for the irrevocable bid that was credited against the buyer's commission. 

  Had the painting sold to another bidder, Zhang would have made a solid profit of $1.5m or as much as half of the buyer's premium should the bidding gone even higher.

  When the sale didn't go through, Zhang started to offer a Francis Bacon diptych he bought from Christie's in 2015 as an alternative form of payment. But Phillips only valued the work at $20m and Zhang had promises of more from Gagosian gallery. 

  Finally, this June, Phillips won a judgment against Zhang to give them control of the Bacon work. 

  Now, another party has come forward claiming that he owns the Bacon.

  Lin San, another Chinese citizen, says he helped out Zhang Chang when Zhang bought the Francis Bacon in London for £12m. Lin says, in a lawsuit, he loaned Zhang the money to complete the purchase. When Zhang failed to pay him this Spring, Lin says it was he who consigned the work to Gagosian. Now Lin San is suing to have his ownership of the work recognized.

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Bacon, Richter Tangled Up in Phillips ‘Jet Fighter’ Crash

August 15, 2017 by Marion Maneker

Two significant art purchases—a Bacon diptych and Gerhard Richter’s Dusenjager—have caught Lin San in a terrible bind. But Lin San was not the buyer of either work. Still, he stands to lose a great deal of money because of a judge’s order.

Lin, a Chinese citizen, loaned another Chinese citizen, Zhang Chang, the money to pay for a Bacon work he purchased in the Summer of 2015 at Christie’s in London for £12m.

Zhang defaulted on the loan leaving Lin San no other option but to consign the Bacon to Gagosian to sell for ready cash.  Here’s the Courthouse News Service on the backstory:

“Mr. Zhang paid Christie’s for the purchase over time, using funds loaned by Mr. Lin for this purpose in accordance with a loan agreement between them executed in June 2015,” the 9-page complaint states. “Those loans from Mr. Lin first began in June 2015, and continued through 2017.”

Lin says Zhang agreed to transfer the painting to him because he was not able to repay the loans.

In the meantime, Lin San claims he did not know that Zhang Chang also bought Gerhard Richter’s Dusenjager at Phillips 17 months later for $24m.

When Zhang Chang failed to pay for the work, Phillips sought a judgment against him in mid-2017 by claiming the Bacon now on consignment to Gagosian. A judge granted Phillips the work in lieu of the payment.

Lin San is now suing to assert his title to the Bacon diptych.

Lin on Thursday filed a petition to intervene in Phillips Auctioneers v. Chang, saying the painting is rightfully his.

If Lin San wins, Phillips is out of luck. If Phillips wins, Lin San is facing a big loss.

Either way, Zhang Chang has caused a great deal of discomfort within the art world.

Modern Master Paintings Cause Legal Pile-Up in NY (Courthouse News Service)