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Home » News » Leonardo case exposes back-room deals

Date: 11 January 2011

Leonardo case exposes back-room deals

London. A High Court judgment involving dealers Daniella Luxembourg and Simon Dick­inson has ruled that Dickinson’s company took an unlawful commission on a $7m Leonardo drawing. The two dealers negotiated the sale of Madonna and Child with St Anne and a Lamb from a Liechtenstein foundation associated with the Sackler family to an American buyer.

Dickinson’s company re­ceived a $1m commission on the 2007 deal without the knowledge of the Liechtenstein seller, the Accidia Foundation. The court found that he had been “unwise” not to check that the seller had authorised the arrangement. This judgment is therefore likely to have major ramifications for the London art trade.

The civil case also led to disclosures about commissions and payments. These included $500,000 to Gheri Sackler (a former wife of philanthropist Mortimer Sackler), $500,000 to Luxembourg’s company, $50,000 to Marie-Lucie Bisiaux (Dick­inson’s Paris director) and £110,000 to Gloria Cohen (advisor to the buyer). The private treaty sale to the American buyer was arranged by London-based Simon C. Dickinson Ltd, which received $1m above what was passed on to Luxembourg Art Ltd.

Although not named in the court judgment, the buyer was Nasser Kazeminy, chairman of NJK Holdings, a private American investment company. Kazeminy later returned the drawing because of concerns over the attribution. The work was then repurchased by Dickinson for $7m—he may still be the owner.

A legal claim was subsequently initiated by Accidia, the seller. It took action in the London high court against Simon C. Dickinson Ltd to recover the $1m commission.

Mr Justice Vos commented that Dickinson “found it hard to understand the problem with his being the arbiter of whether his own commission was fair. However, equity lawyers may take a different view.”

In his judgment of 26 November, Judge Vos ruled in favour of Accidia. He ordered Dickinson to reimburse Accidia with $800,000 of the $1m ­commission (less £2,500 for restoration costs of the drawing), plus interest.

During the Accidia hearing it had emerged that Sackler had in 2006 been pursuing a sale to two of the world’s major collectors before Luxembourg became involved. Discussions were held over Leon Black buying the Leonardo and donating it to New York’s Metropolitan Museum. There had also been contacts with the advisor to Mexican collector Carlos Slim Helú. Nothing came of either approach.

Paul Howcroft, a lawyer with Fladgate LLP (which acted for Accidia), said that the case “lifts the lid on arrangements between dealers in private treaty art sales”.

Shedding light on the art market

The dispute has provided a remarkable insight into a string of commissions that were paid over the sale, one of which has now been ruled unlawful. John Martin, QC for the claimant, the Accidia Foundation, said the case sheds “a bright light on an extremely murky corner of the art world”.

Five years ago Accidia wanted to sell the work and Gheri Sackler, acting for Accidia, approached dealer Daniella Luxembourg. Sackler later received $500,000 from Accidia. Sackler said it was because of “over 20 years of work that I carried out on behalf of certain trusts”.

Luxembourg’s company re­ceived a $500,000 commission. Accidia assumed she would find the buyer, but her main role turned out to be reaching an agreement with Simon C. Dickinson Ltd. The gallery agreed on a “net return price” (price paid minus his commission) of $6m. The court was told by co-director Simon Dickinson that such arrangements are common among dealers. However, the court ruled that they are unlawful unless they are understood and approved by the seller.

Dickinson found the buyer, Nasser Kazeminy, chairman of NJK Holdings, a private American investment company. The initial asking price was $10m, but $7m was agreed.

Two commissions were paid by Dickinson. Marie-Lucie Bisiaux, head of his Paris office, received $50,000. She helped find a restorer and knew Kaze­miny’s advisor, Gloria Cohen.

Dickinson also paid £110,000 to Cohen. This caused some surprise in court, since Emma Ward, another Dickinson director, said that Cohen “looks after his [Kazeminy’s] collection”.

The sale to Kazeminy was concluded on 9 August 2007, with $7m being paid to Dick­inson. The following day $6m was transferred to Luxem­bourg, who passed on $500,000 to Sackler and $5m to Accidia.

Kazeminy then returned the draw­ing to Dickinson, who bought it back for $7m, on 17 June 2008. Kazeminy contended that the major auction houses had “serious concerns about the authenticity of the drawing”.

At the time of the 2007 sale, Accidia assumed the price paid by the buyer was $6m, not $7m. It believed that any commission to Dickinson would come from the $500,000 received by Lux­em­bourg. Accidia only learned what had happened in 2008.

Legal ruling

Accidia then took legal action against Dickinson, arguing the $1m should be returned. This case was heard from 16 to 19 No­vem­ber 2010.

Luxembourg was not summoned by either side and Mr Justice Vos described the situation as “Hamlet without the princess”. He criticised Luxem­bourg, saying that she “must have known that Dickinson was taking an additional commission above $6m” and “had not told Mrs Sackler that Dickinson was, to her knowledge, taking such a commission”. The judge de­scribed Dickinson as “a straightforward witness” and as a “great expert in fine art”.

On the main issue, the judge ruled for Accidia: “It would be just and equitable…for Accidia to pay what it would have paid had it known that Dickinson had achieved $7m for the drawing.” Dickinson should reimburse Accidia with $800,000 (minus £2,500 which he paid for re­stor­ation), plus com­pound interest. Sackler told us she is “very happy that justice has been done”.

Dickinson said: “We abide by the judge’s decision. However Mr Justice Vos indicated that there would be good reasons to proceed against a third party, and it is our intention to do so. At every stage in this affair we sought to do the right thing…We paid commissions where we felt honour bound (though not legally bound) to pay them. We charged a fair and reasonable commission for our work. And when the buyer decided that he was no longer happy with the deal, we refunded him in full.” It had been right to fight the case, since “our reputation is intact, and that was something worth fighting for”.

Luxembourg’s lawyer told us: “Luxembourg Art Ltd, which was the sole and exclusive agent of Accidia Foundation for the sale of the work, relied fully on the representation by Simon C. Dickinson Ltd in a written agreement dated 9 August 2007 that Dickinson was acting as agent to the buyer. Mr Justice Vos did not accept that this representation was correct.”

Key players

Accidia is a Liechtenstein foundation which bought the Leonardo in 2006. The Art Newspaper understands it is a family trust associated with part of the Sackler family.

Gheri Sackler, based in Monaco, was once married to the late philanthropist and donor to the arts, Mortimer Sack­ler. Acting for Accidia, she received $500,000 in re­gard to the Leonardo sale. She is a member of the Gug­genheim’s acquisitions committee.

Daniella Luxembourg is a London- and New York-based dealer. Jersey-registered Luxembourg Art Ltd sold the Leo­nardo for Ac­cid­ia for a $500,000 commission.

Simon Dickinson is a London dealer, operating as Simon C. Dickin­son Ltd. His company sold the Leonardo for $7m for a $1m commission.

Marie-Lucie Bisiaux, head of Dickinson’s Paris office, received a $50,000 commission from Dickinson.

Gloria Cohen advises Nasser Kazeminy on his collection. She re­ceived £110,000 from Dickinson.

Nasser J. Kazeminy was born in Iran, brought up in Britain and moved to the US in 1969. He paid $7m for the Leonardo in August 2007.

Source: The Art Newspaper


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