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Case Review: Rybolovlev v. Bouvier

By Chris Michaels

Amadeo Modigliani, Nu Couche au Coussin Bleu (1916)
Amedeo Modigliani, Nu Couche au Coussin Bleu (1916)

A criminal complaint filed in the principality of Monaco on January 12, 2015 sent shockwaves through the international art market. In it, Russian oligarch Dmitry Rybolovlev, businessman and owner of the AS Monaco football club, reportedly alleged fraud and money laundering against Yves Bouvier, a Swiss art dealer and president of Natural Le Coultre S.A., a storage business operating freeports in Geneva, Luxembourg, and Singapore. Bouvier was detained in Monaco in February and his assets were frozen by a Singapore court in March.

The dispute erupted following a pre-New-Years-eve conversation between Rybolovlev and Sandy Heller, Steven Cohen’s art advisor. During their conversation, Heller informed Rybolovlev that Cohen, a billionaire hedge fund manager, sold a Modigliani from his collection to an anonymous buyer for $93.5 million. Unbeknownst to Heller, Rybolovlev had recently purchased the Modigliani from Bouvier for $118 million, which represented a markup of more than $24 million that went to Bouvier.

This case not only highlights the tax implications surrounding freeports, which allow for luxury goods to be stored and sold tax-free, but also emphasizes the need for greater transparency in private sales. Commonly, private sales of art, especially those of high value, are shrouded in secrecy. Confidential components of private sales typically include identity of the parties, purchase price, as well as commissions collected by dealers. A problem for collectors arises when collectors and dealers enter into an agreement whereby a net return price is set, which guarantees the amount that the selling collector will receive for the art. The issue here is that the seller may never know the actual final selling price for the art and/or the amount of the commission received by the dealer. In Rybolovlev’s case, this situation was reversed, as he, the buyer, found out the “real” final selling price post-sale. As an aside, it would be interesting to know if Steven Cohen was aware of either the price Rybolovlev paid for the Modigliani or the commission paid to Bouvier. I would speculate that he did not.

To solve the problem of unreasonably inflated commissions, transparency is paramount in private art sales. When collectors and dealers enter into consignment agreements, it is imperative that the agreement include terms that specifically outline the total commission to be collected by the dealer OR that the selling collector agrees to the net return price and also agrees that the dealer may collect any commission that is above the net return price. Handling the issue of commissions in private sales will alleviate any concerns of dealer impropriety that may arise after a sale.

According to the April issue of The Art Newspaper, a temporary order against Bouvier disallows sales of personal assets worth up to $550m and asks Bouvier to surrender Mark Rothko’s No 6 (1951) as a collateral to his would-be-debt to Rybolovlev if the court finds that the transaction was unconscionable.


About: Chris Michaels is a litigation attorney in the Philadelphia office of the Atlanta, GA-based law firm, Cruser & Mitchell, LLP, where he actively pursues his interest in the field of art law. He may be reached at (267) 888-2842,, or on Twitter @CMichaelsartlaw.

Disclaimer: This article is intended as general information, not legal advice, and is no substitute for seeking representation.