After a Guarantor Crashed the Sale of Gerhard Richter’s ‘Fighter Jet’ in 2016, Phillips Is Trying Again—at a Lower Price
Phillips is hoping to recoup some of the $24 million it lost when a guarantor backed out of the original deal.
It was supposed to be a blockbuster auction lot. But when a guarantor defaulted on the deal, the 2016 sale of Gerhard Richter‘s Jet Fighter painting—estimated to fetch as much as $35 million—crashed instead.
Now Phillips is trying once again to sell Jet Fighter (1963) in its London evening sale on March 7. But this time around, it’s priced at the much lower estimate of £10 million to £15 million ($13 million to $19 million).
The house is hoping to recoup at least some of the $24 million it paid to the consignor, the late billionaire philanthropist and Microsoft co-founder Paul Allen, during the botched 2016 sale.
The following year, the auction house sued the third-party guarantor, described as a wealthy Chinese businessman named Zhang Chang, for payment. Typically, a third-party guarantor assumes all or part of a sale’s risk in exchange for a share of the upside if the work outperforms expectations at the sale. But if the bidding doesn’t exceed the minimum guaranteed price, the guarantor agrees to buy the work.
Because Jet Fighter failed to hit that minimum guaranteed price—in this case $24 million—Zhang was meant to purchase it at that price. “However, after placing the highest bid, Mr. Zhang declined to pay for the Richter painting,” Phillips said in papers filed with the New York State Supreme Court. Zhang even collected a $1.5 million commission from the auction house as part of his deal with Phillips.
Phillips’s attorneys and its CFO sent several reminders over the next few months to Zhang about his payment obligations, but they say he failed to deliver. “Phillips has therefore suffered a substantial loss as a direct result of Mr. Zhang’s failure to fulfill his payment obligation” under the guarantee, the lawsuit says.
Matters were complicated further by the fact that Zhang lives in China and used this as a basis to claim immunity. But when Phillips’s lawyers learned in 2017 that Zhang was trying to sell a Francis Bacon diptych, Study for Head of Isabel Rawsthorne and George Dyer (1967), at Gagosian Gallery in New York, they sought a restraining order on the work, barring the gallery from selling it.
But in another twist, it turned out that Zhang had borrowed the $19 million to buy the Bacon work at Christie’s London in 2015—and allegedly never paid back his lender, fellow Chinese citizen Lin San. Now, San was also seeking to retain control of the Bacon.
Phillips and San confidentially settled the matter a year ago and the auction house now has title to both the Bacon and the Richter. Lin’s attorney did not immediately respond to a request for comment.
“Because we paid the consignor of the painting in full, we are seeking to recoup our investment,” Jean-Paul Engelen, co-head of 20th-century and contemporary art, told artnet News in an email. “This painting, one of the artist’s first photo paintings dating back to the dawn of German Pop art, is among the first of a group of eight celebrated works Richter made of warplanes during the early 1960s. Of these eight works, four are in German museum collections.”
Now the work will receive top billing at the London sale because, Engelen says, “we believe it’s a masterpiece.”
Follow artnet News on Facebook:
Want to stay ahead of the art world? Subscribe to our newsletter to get the breaking news, eye-opening interviews, and incisive critical takes that drive the conversation forward.