A U.S. magistrate judge said on Tuesday that a Jean-Michel Basquiat painting that was used by disgraced dealer Inigo Philbrick in his massive art fraud belongs a collector misled by Philbrick and not the high-profile art lender that he also misled.

The collector, Alexander “Sasha” Pesko, has been fighting it out with Athena Art Finance for more than five years in court filings that detail a complicated and conflicting series of transactions by Philbrick, who was released from federal prison this year, after pleading guilty to wire fraud in 2021.

Philbrick acquired the 1982 Basquiat from the Phillips auction house for $12.5 million in 2016. However, when he sold shares in it to Pesko and another collector, Damian Delahunty, he said that they were acquiring the piece from a Pennsylvania firm SKH Management Corp. that did not, in fact, exist. (Delahunty and Pesko have been allies in the litigation, though the judge’s writing pertains only to Pesko.)

The plan Philbrick proposed was to resell the work for a profit. Pesko bought a 66 percent of it, for about $12 million, through his company Satfinance, and Delahunty took a 12.5 percent stake, paying $2.75 million.

After closing those deals, Philbrick proceeded to resell the Basquiat, in full, to an offshore entity called Boxwood that he had set up on the island of Jersey. He then included the piece in a series of works that he used as collateral to secure a $10 million loan from Athena. In 2017, the Basquiat was transferred to an Athena storage facility in New York.

In October 2019, around the same time that Philbrick was hit with his first major fraud lawsuit, and shortly before he fled the U.S., Athena sent Boxwood and Philbrick a default notice. A New York judge subsequently ruled that Philbrick owed Athena $14.3 million, and the firm moved to gain title to the Basquiat.

Not surprisingly, Satfinance and Delahunty objected. The parties have been fighting over the painting ever since.

The U.S. magistrate, Valerie Figueredo, wrote that Philbrick’s transfer to Boxwood, via his company Inigo Philbrick Limited, was “a fraudulent conveyance” and that Boxwood “had no rights in the painting and thus could not convey a security interest to Athena.”

This is the first time that there has been any real clarity on the ownership of an artwork caught up in Philbrick’s scheme. However, Figueredo’s finding is technically a recommendation to the presiding judge on the case, U.S. District Court Judge George B. Daniels, who will make the final, binding decision.

Athena plans to appeal the decision. One of its attorneys, Jonathan Shapiro, said via email, “Our client utilizes an industry leading, well-trodden approach to asset-backed lending. Ultimately, we expect that the court will rule—as other courts have in the past—that the secured lender is entitled to enforce its rights against Philbrick and, in this case, his ‘silent partners.'”

Satfinance attorney Judd Grossman declined to comment.

Gregory Clarick, an attorney for Delahunty, told said in an email, “We are pleased that the court correctly and sensibly found that Inigo Philbrick could not transfer the painting to Athena after he sold interests to Satfinance and to our client Delahunty Ltd.”