After more than four years of litigation, a federal judge has delivered our team a total victory, ruling that our client holds full title to the multimillion-dollar Basquiat painting at the center of disgraced art dealer Inigo Philbrick’s massive fraud. 

At the heart of this dispute is Humidity, an important painting by celebrated American artist Jean-Michel Basquiat.  In 2016, Inigo Philbrick Limited (“IPL”), an entity controlled by the then-up-and-coming Philbrick, made an agreement with our client, Satfinance Investment Limited, providing Satfinance with “full title” to the work and a profit-sharing arrangement upon the work’s anticipated resale.  Satfinance later learned that this initial deal was rife with trickery by Philbrick—the bill of sale that IPL furnished to Satfinance was a complete forgery, and Philbrick overstated the purchase price by $6 million—successfully misleading Satfinance into unwittingly funding the entire purchase.

Then, while the work was in Philbrick’s physical custody to market and resell, Philbrick—without Satfinance’s knowledge or consent, and without any authority—first purported to transfer the work’s title to an offshore entity he wholly owned, and then he attempted to pledge the painting to a lender, Athena Art Finance Corporation, as collateral on a loan for his own benefit.  In doing so, he represented that his offshore entity had sole title to Humidity—which, of course, it did not.

Philbrick’s scheme unraveled in October 2019 when he simply disappeared, leaving his various creditors in the lurch.  Discovered several months later on the remote South Pacific island of Vanuatu, Philbrick was extradited, indicted for wire fraud, convicted on a guilty plea, and sentenced to seven years in federal prison.  In the meantime, his many creditors and victims were left to sort out their competing claims, often involving artwork he had sold or pledged multiple times over.  

In June 2020, Philbrick’s lender, Athena, commenced this lawsuit seeking a ruling that it was entitled to sell Humidity to repay Philbrick’s eight-figure debt.  Satfinance promptly removed the action to federal court in the Southern District of New York and asserted claims of its own, seeking the return of its painting and a declaration that it still holds full title to the artwork.

Following extensive fact and expert discovery, all parties cross-moved for summary judgment in July 2023.  Earlier this month, following a June 2024 oral argument by Judd Grossman, the Court handed Satfinance a complete victory, holding that Satfinance should be declared the full title holder to the painting and Athena’s claims to the painting should be rejected in their entirety. 

Adopting Satfinance’s reasoning wholesale, Magistrate Judge Valerie Figueredo ruled as a matter of law that the contract between Philbrick and Satfinance “unambiguously indicate[s] that Satfinance held full title to the Painting.”  And Judge Figueredo cited Philbrick’s guilty plea in ruling that his attempted transfer of rights to his offshore entity must be set aside as a fraudulent conveyance.  While the ruling delves into a number of important issues of New York law, the overarching result is simple:  a borrower cannot mortgage someone else’s property.