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(Bloomberg) -- It was meant to be one of the world’s top collections of 20th century art, anchored by Amedeo Modigliani nudes and Claude Monet water lilies.

But two years after Dmitry Rybolovlev sued his dealer, alleging he was overcharged by as much as $1 billion, the Russian fertilizer magnate is unloading works he acquired at often record prices. He has already sold three for a loss totaling an estimated $100 million, and is offering five more at Christie’s auctions in London starting next week, some for a fraction of their purchase prices.

Rybolovlev—whose fortune totals about $9.8 billion according to the Bloomberg Billionaires Index—invested about $2 billion in 38 works, from Leonardo da Vinci to Pablo Picasso. They were procured privately by Swiss art dealer Yves Bouvier, better known for creating a network of tax-free art storage warehouses in Singapore and Luxembourg.

Rybolovlev was among new buyers from Russia, China and other emerging economies who drove an unprecedented expansion of the art market in the past decade. Booming wealth created a network of collectors hungry for trophies by top modern and contemporary Western artists and willing to pay almost anything. Between 2003—the year Rybolovlev met Bouvier—and 2014, global sales more than tripled to $68 billion.

Since then, the market has contracted, and some of the art world’s most expensive pieces have been resold for less than their purchase price, mired in lawsuits and investigations.

The biggest of these disputes began in February 2015, when Rybolovlev filed a criminal complaint against Bouvier in Monaco, claiming the dealer fraudulently misrepresented his acquisition costs. Rybolovlev, 50, has been selling off the pieces privately and at auction—some for steep losses, according to calculations based on court filings, art catalogues, auction results and people familiar with the transactions. Prices of euro- and pound-denominated purchases were converted using exchange rates at the time.

Two Rybolovlev trusts in the British Virgin Islands recouped “less than $50 million” when the Russian sold Paul Gauguin’s “Otahi,” according to court papers they filed in New York. That’s about 60 percent below the $120 million Rybolovlev paid. In November 2015, he sold Gustav Klimt’s “Wasserschlangen II” for $170 million, down from the $183.8 million purchase price. In May 2016, his Auguste Rodin sculpture, “L’Eternel Printemps,” fetched $20.4 million, an auction record for the artist but less than a half the $48.1 million he paid.

“The gulf between Christie’s estimates and the original purchase prices of the works is a further illustration of the unprecedented scale and audacity of the fraud that the plaintiffs allege was perpetrated by Mr. Bouvier,” Sergey Chernitsyn, a representative of the Rybolovlev Family Office, said in an e-mailed statement. The office is an umbrella organization for the trusts.

Bouvier, 53, was arrested and held overnight by Monaco police after Rybolovlev’s 2015 complaint. His lawyer, Ron Soffer, said he’s confident Morgan Raymond, the Monaco magistrate investigating the criminal complaint, will decide not to charge Bouvier formally and will dismiss the case. Raymond declined to comment through his clerk.

“As Singapore’s highest court noted, the buyers in this case ‘obtained the masterpieces which were precisely what they wanted, and these were all transacted at prices they agreed to pay,”’ he added, citing a ruling in a related civil case. 

Bouvier said he is baffled why the billionaire would choose to sell now. “I have no idea, you would need to ask Mr. Rybolovlev” he said in a telephone interview. “The fact is that there is no ‘market price’ for masterpieces.”

The Swiss dealer contends he has lost “many hundreds of millions” in each of the last two years in foregone revenue from art deals because clients no longer trust him as a result of the litigation.

Christie’s is auctioning off at least five more pieces: another Rodin sculpture and paintings by Gauguin, Picasso, Rene Magritte and Mark Rothko. The auction house estimates the value of Magritte’s 1938 “Le domaine d’Arnheim” between $8.1 million and $10.6 million, compared with the $43.5 million Rybolovlev paid. The estimates for the other works also are below the purchase prices.

The sales make “sense from a legal standpoint,” according to Annabelle Gauberti, founding partner of London-based art law firm Crefovi. Until Rybolovlev has sold the works, “he cannot say that he’s suffered an economic prejudice.” 

He also faces a steep divorce bill: A Geneva court ordered him in 2015 to pay his ex-wife $605 million as part of divorce proceedings. 

But the legal contretemps just may have soured Rybolovlev’s appreciation of his collection, and he wants to get rid of it.

“It’s totally understandable why someone may want to sell, especially if one is surrounded by art that has a bad memory,” said Brett Gorvy, co-founder of Levy Gorvy gallery and former global head of Christie’s postwar and contemporary art. “You want to move on.”

Works Still To Be Auctioned

Bought: $35 millionChristie’s estimate: $8.1 million-$10.6 million


Bought: $10.4 millionChristie’s estimate: $4.9 million-$7.5 million


“Te Fare (La Maison)” (1892) by Paul Gauguin

Bought: $85 millionChristie’s estimate: $15 million-$22.4 million


“No. 1” (1949) by Mark Rothko 

Bought: $36 millionChristie’s estimate: $10 million-$15 million


“Le domaine d’Arnheim” (1938) by René Magritte

Bought: $43.5 million Christie’s estimate: $8.1 million-$10.6 million



To contact the authors of this story: Katya Kazakina in New York at kkazakina@bloomberg.net, Hugo Miller in Geneva at hugomiller@bloomberg.net.

To contact the editors responsible for this story: David Gillen at dgillen3@bloomberg.net, Melinda Grenier Margaret Collins

©2017 Bloomberg L.P.

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