Sotheby’s Accused of Undisclosed Conflict of Interest . . . Again

HickspeaceablekingdomI see via the Wills, T & E blog that Sotheby’s has been accused of an undisclosed conflict of interest by Halsey Minor, the founder of CNET.  The auction house allegedly did not disclose all the information it should have when it sold this work, The Peaceable Kingdom with the Leopard of Serenity, Edward Hicks (c. 1846-48).  Halsey bought the work at a Sotheby’s auction last year for $9.6 million.

Lee Rosenbaum and Donn Zaretsky  covered the initial suit by Sotheby’s back in 2008.  But now Halsey is claiming he was not informed that Sotheby’s was selling the work to recoup money owed by the previous owner of the painting, and the auction house had an undeclared interest in another work Minor bought, Childe Hassam’s Carriage in Winter.  The dispute arose when Halsey refused to pay for these works and another and Sotheby’s brought suit.  Halsey counter-sued asserting Sotheby’s conflict of interest, while Christie’s has argued it has a proper “security interest” in the works, but denies this rises to an ownership interest which it should have disclosed.

The problem arises because Sotheby’s made itself appear as an impartial advisor, when in reality it was motivated to sell the works to pay off the debts it was owed by previous owners of a couple of these works.  It seems Minor really relied on an employee of Sotheby’s, and she did not reveal the other interests in these works.

As Zaretsky and Rosenbaum pointed out last year, both the New York Times and Bloomberg had revealed that Sotheby’s had an interest in the Hicks work.  Which seemed to hurt his case of course.  But if there was another interest in another work, that could change things.

Matthew Garrahan, Sotheby’s accused of painting conflict, [Financial Times]

Questions or Comments? Email me at derek.fincham@gmail.com

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