I thought my $100million divorce was my biggest problem but an Andy Warhol artwork made my life a nightmare

Manhattan socialite Libbie Mugrabi thought her $100million divorce would be her biggest problem – but it turns out a valuable Andy Warhol artwork was about to give her an even bigger headache. 

Mugrabi, 45, gained ownership of several valuable pieces amid her acrimonious split from billionaire art market tycoon David Mugrabi in 2020. 

Three years later, she opted to use one of the pieces – a 1982 painting by Jean Michel Basquiat showing a haloed Christ-like figure with a crescent moon above – to secure a $3million loan from Art Capital Group. 

Mugrabi said the lender, which specializes in using artworks as collateral for loans, also requested a series of Andy Warhol portraits of Jacqueline Kennedy Onassis that the socialite claims are worth at least $1million, along with a $12,500 ‘due diligence fee’. 

But in the end, they declined to give Mugrabi her loan – which she wanted to purchase a home in the south of France – citing credit score concerns. Directors declined to return the Warhol series, which it said was part of the agreement. 

Mugrabi disagreed, accusing the lending tycoons at the top of the firm of effectively stealing from her, in a report she filed with police in Southampton, New York. 

The daughter of plastic surgeon Charles Scher also echoed the same accusation in less formal tones during an outburst at Amaranth Restaurant, a fancy spot on the Upper East Side, according to the New York Times.  

‘You stole my painting like a Nazi, right out of my house,’ Mugrabi, who is Jewish, shouted outside at the time.

In February, she took their feud further by plastering ‘Wanted’ posters depicting Art Capital’s directors outside their Madison Avenue offices and in East Hampton.

The directors – Ian Peck and Terence Doran – hit back with a $30million lawsuit in September where they accused Mugrabi of inciting ‘an unlawful campaign of intimidation and falsely and maliciously defaming’ them. 

Peck wrote in an affidavit that the company had been forced to sell the Warhol art for $325,000 to cover its escalating costs due to reputation damage. Mugrabi has denied defaming anyone, and has countersued twice. 

‘They’re nobody,’ she said in a phone interview with the New York Times. ‘I’m the star, not them, right?’ 

Mugrabi’s loan came with an interest rate of more than 10 percent, court papers show. 

The socialite claims in her legal filings that the Basquiat she put up as collateral was worth more than $30million – but the lender said an auction house last year estimated its value between $4million and $6million. 

Mugrabi’s lawyer, Claude Castro, said Art Capital saw his client as a way to ‘make money by charging fees and expenses’, and that they never planned to give her the loan, according to the New York Times. 

Art Capital hit back – saying in a lawsuit that it sought only ‘rightful fees and expenses’ as part of a business deal while slamming Mugrabi’s claims as ‘absurd’. 

Mugrabi claims in a legal filing that the firm took the Warhol under the auspices that the move was temporary and they needed to inspect it – not that they would retain it indefinitely. 

She reported this to police – though they disagreed with her account, saying that there was ‘no evidence to support any criminality at this time’, court documents show. 

Art Capital said in a statement to the New York Times that ‘the sale of the Warhol did not begin to cover ACG’s losses’.

Mugrabi’s woes follow her acrimonious divorce from art dealer David Mugrabi, whose family owned the world’s largest private collection of Warhols at one point. 

The couple enjoyed a whirlwind romance in 2001 and married four years later at the Pierre Hotel in New York, with Mugrabi wearing an expensive tailored Victorio y Luccino dress. 

They went on to have two children and lived a life of luxury together over the next few years, frequenting art fairs in Venice, along with vacations in Portofino, Miami and St Bart’s. 

But things took a turn when Mugrabi said she woke up after a 2018 dinner party at their Hamptons home to find her husband and another woman naked and asleep below a painting by Richard Prince. 

Their ensuing divorce made headlines around the world as they argued over how to split their enormous wealth, with Mugrabi claiming she had to sell her $100,000 diamond ring to retain a divorce lawyer. 

The court hearings were peppered with drama. Mugrabi even turned up to one hearing in a bulletproof vest, claiming she was afraid her husband might have hired a hit man – something he has strongly contested. 

They finally settled in 2020, with Mugrabi receiving the Sag Harbor mansion and some artworks.