In the Bitter Divorce of Collecting Royalty Libbie and David Mugrabi, Art Is at the Center of the Battle

While all art-world eyes are on the divorce between real-estate titans Harry
and Linda Macklowe—and the fate of their $800 million art
collection—another decoupling of elite collectors is making its way
through the courts. The divorce of art-world royalty Libbie and
David Mugrabi, first filed in 2018, is moving at a glacial pace as
the two sides continually clash in court. At stake is an art
collection worth hundreds of millions of dollars, pricey real
estate in Manhattan and the Hamptons—and secrets about how the art
world’s elite do business.

The latest round of tense back-and-forth came in New York
Supreme Court in Manhattan on February 13 and lasted less than two
hours before the presiding judge, Donald Hoffman, told the parties
that they remained “so far apart” on the issues that the matter
would have to be taken up at a later court date on April 2.

Judge Hoffman encouraged the Mugrabis and their attorneys to
“get creative in terms of the settlement,” to avoid “discussing
specific assets,” and instead to reach an agreed-upon
“number.” Sources told Artnet News that while Libbie is
seeking custody of their two children, David refuses to address the
issue until a monetary settlement is reached.

The Mugrabi family, including David’s father, Jose, and his
brother, Alberto “Tico” Mugrabi, have been fixtures and active
traders at major auctions for at least two decades. They are widely
known to own the largest private collection of Andy Warhol
paintings in the world, as well as numerous works by blue-chip
artists including Jean-Michel Basquiat, Richard Prince, George
Condo, and KAWS.

The divorce between Libbie and David became tabloid fodder after
news broke that Libbie had gotten her nanny to surreptitiously
record a confrontation with a woman she had allegedly found
sleeping nude with her husband. But the split also has the
potential to lift the curtain on the business practices of one of
the most powerful collecting dynasties in the art world. In
evaluating David’s net worth, lawyers may expose the family’s use
of offshore corporations to avoid scrutiny.

The art collection is expected to become a central topic in the
proceedings. According to a New York
Times report in January 2019, Libbie alleged David
had moved an estimated $200 million worth of art out of their Water
Mill home in an effort to hide assets. (David Mugrabi’s attorneys
did not respond to request for comment.)

At issue is art acquired between 2005, when the couple married,
and 2018, when they filed for divorce. “Marital property is defined
as property that
is acquired from the date of the marriage to the date of a divorce
action or an anti-nuptial agreement is signed,” Ken Jewell, a
matrimonial lawyer who is not involved in the case, explained to
Artnet News.

In the event that some or all of the art has been placed in an
offshore trust, as some sources have alleged, “if the assets were
created during the marriage, and deemed marital property, then the
courts will break open the trust and allocate the property
according to equitable distribution law,” Jewell said.

In addition to deciding which artworks are marital property, the
court is expected to order an appraiser to estimate the value of
the collection. The judge will also have to consider whether
the art was part of a business or was simply hanging on the walls
of their home for personal enjoyment. If it is deemed part of a
business, the court must determine how much Libbie contributed to
that business in order to split up the assets.

Sources told Artnet News Libbie would help negotiate sales of
work hanging on the wall of their Water Mill estate (or related
artwork), which was on full display during dinner parties and other
entertaining events.

Libbie and her attorney declined to comment on the case. A
source familiar with the proceedings told Artnet News that she
plans to ask for $120 million in addition to artworks, the
Watermill house, $1.6 million in legal fees, and $75,000 per month
for 10 years.

The post In the Bitter Divorce of Collecting Royalty Libbie
and David Mugrabi, Art Is at the Center of the Battle appeared
first on artnet News.