Judge Freezes Basquiat in $2.3 Million Fight Over Libbie Mugrabi's Rent Debt

By Grace Kim

A New York judge has blocked the sale or transfer of an untitled 1982 Jean-Michel Basquiat painting held at Phillips, as a landlord moves to seize it to cover a $2.3 million judgment against collector Libbie Mugrabi.

New York County Supreme Court judge Linda M. Capitti signed the order on October 14. It compels Mugrabi and Phillips to appear in court on November 17 and show cause why the painting — along with Mugrabi's 100 percent membership interest in Moo Moo Enterprises, Inc., the entity that holds the work — should not be turned over to satisfy the debt. Mugrabi has not yet responded.

The real estate company 320 E 82nd Owner, LLC filed the petition earlier this month. It stems from rent Mugrabi didn't pay between 2019 and 2020 while living at the Park Mansion, a Beaux-Arts building in Yorkville. A Manhattan court ordered her in 2023 to pay $1.8 million in back rent and attorney's fees. After an inquest in June, a judge added 9 percent statutory interest, bringing the total to $2.3 million.

Why is the painting at Phillips?

The Basquiat has sat in the auction house's possession since at least October 2024, when it was consigned for a London sale. Phillips pulled it from the auction after a lien dispute surfaced.

That dispute involves Art Capital Group, LLC, the art-lending firm (a company that issues loans against artworks as collateral) run by financiers Ian Peck and Terence Doran, who also direct the related entity Empire Chesapeake Holdings, LLC. According to Mugrabi's own complaint in a related case, the two claimed an interest in the Basquiat tied to a $3 million loan arrangement.

Mugrabi disputes that the lien was ever valid. She says the Basquiat was pledged as collateral in an October 2023 term sheet, then swapped out for the 1964 Andy Warhol work Jackie the following month. She also says the $3 million loan was never completed. In July, a judge granted her partial summary judgment, finding Peck and Doran had no right to keep the lien because the loan was never funded and their sale of the Warhol covered any fees owed. Peck and Doran have appealed.

What's the painting actually worth?

The two sides are far apart. Mugrabi has claimed the canvas is worth more than $30 million. The petition, filed by Goetz Platzer LLP on behalf of the landlord, pegs it at $4 million to $6 million.

The fight is one of several legal headaches for Mugrabi since her 2018 divorce from billionaire collector David Mugrabi. In September, a court ordered her Bridgehampton, New York mansion sold after she missed payments on a $3.5 million mortgage. It went for $5.86 million at auction — far short of the $25 million she said it was worth — and she has said she's moving to Florida.

That reported move is central to the landlord's emergency request. The attorneys cited a September 25 New York Post article, arguing Mugrabi was leaving New York "presumably with all of her possessions," raising the risk the Basquiat could slip beyond the court's reach.

Phillips did not respond to a request for comment. Mugrabi couldn't be reached; it's unclear who represents her after she reportedly fired attorney Claude Castro of Castro Law Group last month. The November 17 hearing will determine whether the painting becomes the asset that finally settles the rent debt.