Sotheby’s Sues CNET Founder for $16.8 Million in Fees

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The New York Sun

Sotheby’s, the world’s largest publicly traded auction house, sued Halsey Minor, founder of CNET Networks Inc., for not paying $16.8 million for the purchase of works of art including Edward Hicks’s “Peaceable Kingdom.”

The suit, filed yesterday in Manhattan federal court, claims Mr. Minor bought Hicks’s biblically inspired painting and two other works in May and hasn’t paid for them. The works are worth more than $13 million and the auctioneer said it’s also owed legal fees, interest, and late fees, according to the complaint.

Sotheby’s cited the sale of “Peaceable Kingdom” as one reason for an “exceptional” spring sale in New York, in an August 5 statement on its second-quarter results. The sale set a record for a work of American folk art and for Hicks, a Quaker minister, the New York-based auctioneer said then.

“Minor has failed to make any payment to Sotheby’s for the works,” Sotheby’s said in the complaint. “Sotheby’s initially offered Minor generous payment terms that would have allowed Minor until dates in August to pay for the works.”

Mr. Minor, 43, said in an interview yesterday that he refused to pay $9.6 million for “Peaceable Kingdom” after discovering that Sotheby’s hadn’t disclosed that it had an interest in the work. Such a disclosure would have affected the price, he said.

“They have a massive failure to disclose,” Mr. Minor said, adding that he plans to file a countersuit. “They have an economic interest to misrepresent the facts.”

Mr. Minor said he bought a 476-acre estate in Colonial Williamsburg for $15.3 million last year and is interested in buying the Hialeah Park racetrack in Florida. He is also founder of the San Francisco-based venture capital firm Minor Ventures.

The painting’s former owner, jeweler Ralph Esmerian, bought the work in 1976. In 2000, he promised to donate it to the American Folk Art Museum and about three years ago also pledged it to Sotheby’s as collateral for a loan. Mr. Esmerian has battled Merrill Lynch & Co. over how to repay a $178 million loan that Merrill declared to be in default.

Mr. Minor said in an e-mail that Sotheby’s may have not disclosed its interest in the painting in order to bring in “a huge amount of owed money” from Mr. Esmerian.

A spokeswoman for the New York Department of Consumer Affairs, Courtney King, said in a statement that Sotheby’s disclosure about the availability of loans secured by art collections is fully compliant, .

In about 1816, Hicks began to paint a series featuring the Hebrew Bible’s peaceable kingdom, in which all earthly creatures live in harmony, the Sotheby’s catalog said. Some 62 “Peaceable Kingdom” versions have been discovered. He painted this version, with animals dispersed on the canvas, at the end of his life.

CBS Corp. bought CNET, an Internet company, this year for $1.8 billion. CNET’s site focuses on technology news, consumer advice, and reviews of products such as mobile phones and computers.


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