The son of the late Palestinian businessman Uthman Khatib, who died in July, is suing the investor who was financing lawsuits they brought against Israeli Russian, Mozes Frisch, for allegedly stealing 135 Russian avant-garde paintings.
Among the works are paintings attributed to El Lizzitsky, Kazimir Malevich, and Wassily Kandinsky. Khatib’s son, Prince Castro Ben Leon, argues that they are worth $323 million.
He claims the works were stolen from his family by Frisch in 2019. In January, a Paris court secured the paintings that were seized from Paris-based art authenticators ArtAnalysis in March of last year. ArtAnalysis had been holding the works for Frisch.
The Prague-based litigation funder LitFin Capital was backing the Khatibs’ case. However, LitFin is now reportedly refusing to pay legal bills unless it takes control of the lawsuits. As a result, Castro has accused the firm of violating their funding agreement in a private case before a German arbitrator in Frankfurt, Germany, Bloomberg reports, citing “a person familiar with the matter.”
“Funders always try to spend as little as possible and profit as much as possible, but they usually stay within the bounds of ethics and the law,” said Heiko Heppner, a partner from the law firm hired by Castro, UK-based Dentons. “It became quite apparent that that LitFin was crossing those boundaries.”
The 135 paintings are part of a 1,778-work collection of paintings supposedly by heavyweight Russian modernists. Castro is suing Frisch in Germany for either the return of the stolen works or $323 million (hundreds more paintings from the 1,778-work collection were seized in Frankfurt in 2023). Meanwhile, ArtAnalysis’s owner, Laurette Thomas, along with Frisch and art collector Olivia Amar, are suing Khatib for the return of the works held in Paris, along with an additional $30.5 million in damages (plus legal fees).
LitFin, which launched in 2018, did not reply to a request for comment from ARTnews, but the firm’s CEO, Maros Kravec, told Bloomberg that it doesn’t comment publicly on ongoing proceedings. “We always defend ourselves vigorously against all unfounded, misleading, and agenda-driven accusations using every legal means available,” he said.
LitFin started financing the Khatibs’ litigation at the end of 2023 and agreed to cover a total of almost $10 million, according to Castro. Under the terms of their agreement, the firm was reportedly due to be paid after the paintings were returned to Castro and sold.
Related Articles
According to its website, LitFin specializes in antitrust cases, insolvency, arbitration. It manages a portfolio worth $5.8 billion in claim value across more than 25 major international disputes, Kravec said.
The Khatibs and LitFin previously enjoyed a good relationship, the former praising the firm after the 135 paintings were seized by the French authorities last year. “With the help of Dentons and LitFin, we will follow the perpetrators around the world,” the family wrote in a press release at the time. “We will continue to recover our property and encourage anyone who considers buying works from the Russian Avantgarde to diligently check its provenance and make sure it is not a stolen piece belonging to our family.”
Castro said LitFin refused to pay for further legal costs in late 2024, having spent $4.3 million on the Khatibs’ claims up until that point. He said he is in the process of taking control of the case following the death of his father.
On top of this, Castro also claimed that LitFin asked for him and his father to be removed from the claim, and the company said it wanted to work directly with Dentons. He says that LitFin agreed to pay the $2.3 million in unpaid fees to the law firm only if the new conditions were met.
Heppner, the Khatibs’ attorney, told Bloomberg that Kravec, LitFin’s CEO, offered to cover the outstanding invoices to Dentons, asking that Heppner withdraw from the case against Frisch in return. “Asking a lawyer to betray his client is unspeakable,” said Heppner. “[Kravec] was very much intent on controlling the litigation.”
Khatib brought the lawsuit against LitFin in Germany in February, according to Bloomberg, before he died in July. The suit against Frisch and the arbitration with LitFin are on hold while Khatib’s estate is being settled.
In May, ARTnews reported that as part of the Khatibs’ legal battle to reclaim the 135 disputed paintings, Dentons hired UK-based Doerr Dallas Valuations to appraise the works for insurance purposes. Doerr Dallas assigned a valuation of $208 million. That appraisal, however, came with a “caveat,” Rachel Doerr, the company’s founder and managing director, told ARTnews in a phone call, though she would not discuss the content of that caveat.