NYC socialite Libbie Mugrabi claims her Basquiat was stolen but those accused say she owes them for defamation

A controversial New York City socialite who once showed up to family court in a bulletproof vest for fear her billionaire ex-husband sent a Russian hitwoman to kill her, is suing a pair of art world nemeses she claims secretly undermined her planned sale of a multimillion-dollar Jean-Michel Basquiat painting — as she simultaneously faces foreclosure on her 7,200 square-foot Hamptons manse.

“Jean-Michel sold this directly through Annina Nosei Gallery in ‘82 for $1,500,” she told The Independent, pegging its present-day value at some $30m. “I have the original receipt.”

Financiers Ian Peck and Terence Doran, for their part, tell a vastly different story and have denied any and all wrongdoing, placing the blame directly on Mugrabi’s shoulders.

On Friday, about 90 minutes before she filed her lawsuit against the two, who have made a big business out of lending art collectors money using their collections as collateral, Mugrabi’s mortgage lender filed a foreclosure notice against her, claiming she hasn’t paid a dime of the $3.5m principal balance on her house in Sag Harbor since April 2023.

The breathtaking Sag Harbor property is where Mugrabi, 44, was arrested in 2022 for allegedly menacing her housekeeper with a knife during a dispute over money. Mugrabi says the case against her was dismissed. During her divorce from wealthy art collector David Mugrabi, Libbie accused him of assaulting her at their ultra-luxe Upper East Side address over a disputed Keith Haring sculpture. In 2023, Mugrabi’s then-boyfriend, Von Dutch clothing founder Bobby Vaughan barricaded himself inside the East 82nd Street townhouse in a standoff with police that ended with Mugrabi suffering a split lip and Vaughan charged with assault.

In her lawsuit against Peck and Doran, Mugrabi says she handed over Basquiat’s “Untitled, 1982” last month to an unnamed auction house in London, for a planned October 10 sale. However, before any bidding could take place, Peck and Doran contacted the auctioneer to have the piece pulled from the auction, the lawsuit states. The court docuemnts say the two claimed Mugrabi had signed over the piece to them as collateral for a $3m loan, and that Mugrabi was apparently trying to sell it out from under them.

But Mugrabi says in her suit that she never got the loan, and that the holds, or, liens, Peck and Doran put on the paintings were done without her permission.

“Nothing, no money. I never got anything,” Mugrabi said on Saturday, noting she was awarded the artworks in her divorce settlement. “Not one penny, not one US dollar, not one nickel, not one penny, not one nothing. They still put those [liens] on them.”

Mugrabi’s suit also accuses Peck and Doran of derailing a second attempted auction to be held in New York on November 10, alleging they threatened legal action against the auctioneer if the sale went through.

The situation can be traced back to November 2020, when Mugrabi approached Peck and Doran about taking out a $3 million loan, using the Basquiat as collateral, the lawsuit states. But, it goes on, Mugrabi subsequently changed her mind and substituted “Jackie, 1964,” a painting by Andy Warhol of former First Lady Jacqueline Kennedy Onassis, as the “sole collateral” for the loan, instead of the Basquiat.

However, while Mugrabi didn’t get the loan, and she took the Basquiat back, her lawsuit contends that Peck and Doran still filed paperwork giving themselves an ownership interest in both the Basquiat and the Warhol. This, according to the suit, was done “without [her] knowledge or consent.”

Peck and Doran have since refused to give up the paintings and their rights to the works, according to Mugrabi’s suit, which demands at least $20 million and the return of the art.

In their own lawsuit filed September 26, about two weeks before the London auction was set to take place, Peck and Doran accuse Mugrabi of trying to destroy their reputations and say her behavior has cost them numerous deals. They also say Mugrabi “failed to qualify for a loan, due to her checkered credit history,” but that while it was pending, she still ran up thousands of dollars in storage fees and due diligence costs that she was unable to immediately pay. Instead, she offered to let Peck and Doran hold onto the Warhol she had given them as collateral, until she could satisfy her debt, according to Peck and Doran’s suit.

Yet, the duo’s suit claims, Mugrabi soon decided she didn’t want to pay back the money she owed and instead “embarked on an outrageous campaign of intimidation and defamation,” intended to “bully” Peck and Doran into returning the Warhol without ever being reimbursed.

First, their suit goes on, Mugrabi falsely reported Peck to the Southampton Police Department, saying he had stolen the Warhol from her house in a burglary. Next, Mugrabi hung “WANTED” posters around the Hamptons and New York City, calling Peck and Doran thieves and offering a $10,000 reward for the return of the Warhol, according to the suit. It says the stunt attracted the notice of the New York Post, which ran a story about it and damaged the pair’s personal and professional reputations.

Peck and Doran say Mugrabi is cash-poor and shouldn’t be able to sell the Basquiat until their suit is able to run its course, so, if they win, the proceeds can be used to pay the $30 million in damages they are asking for. Mugrabi’s “defamation and intimidation tactics,” according to Peck and Doran’s suit, caused them “financial loss, professional stain, and emotional distress.”

Although Mugrabi referred to herself multiple times on Saturday as “rich and famous,” she told The Independent that her troubles have now compounded to the point where she has a full-time attorney on the payroll to handle legal issues.

“The market’s pretty bad right now, and I do need some cash,” Mugrabi said, claiming she has not had a reliable income stream for an entire year, during which time her business has been on hold. “I’m a fashion designer, and I need to fund my fashion business and pay my bills. I mean, I need to pay my bills like everybody else… Can you believe this s**t?”