On Tuesday (March 24), the Federal District Court in the Southern District of New York ruled to seize two paintings acquired by Chinese restaurateur Zhang Lan at a Sotheby’s auction in New York in 2014 for a bid of 29.1 million US dollars. The paintings in question are Andy Warhol’s “Electric Chair” and an untitled self-portrait by Martin Kippenberg.
The court also determined that Zhang Lan’s transfer of the painting rights constituted a “fraudulent conveyance,” with the intention of placing assets beyond the reach of creditors.
This story traces back to a merger case thirteen years ago. In December 2013, La Dolce Vita Fine Dining, a subsidiary of the European private equity fund CVC Capital, acquired 82.7% of the shares of the Quanjude restaurant chain from Zhang Lan and her holding company for approximately 286 million US dollars.
Zhang Lan founded the high-end dining brand “Quanjude” in 2000 and won the bid to become the sole Chinese food service provider for the 2008 Beijing Olympics.
Following the completion of the acquisition by CVC, Quanjude’s financial performance saw a significant and unexplained decline. After investigating, CVC accused Zhang Lan of manipulating and falsifying sales data and financial indicators of Quanjude before the transaction (from 2013 to early 2014).
Starting in 2015, during more than a decade-long legal process, Zhang Lan was accused of hiding assets globally to evade debt enforcement.
In March 2015, CVC applied to the Hong Kong court for an asset freeze, freezing the assets of Zhang Lan and her associated companies. The Hong Kong High Court judge supported this move, citing the risk of asset dispersion as CVC had paid substantial funds with uncertain whereabouts.
In March 2015, CVC filed for arbitration with the China International Economic and Trade Arbitration Commission (CIETAC) regarding this case. Zhang Lan accused CVC of using the shares as collateral for a loan without consent.
In April 2019, the arbitral tribunal ruled for Zhang Lan to pay approximately 142 million US dollars to CVC, including damages and interest. Zhang Lan subsequently applied to the Second International Commercial Court of the Supreme People’s Court of China to set aside the arbitration award, which was rejected in 2020, finalizing the decision.
Zhang Lan was found guilty of contempt of court by the Hong Kong court in 2019 for failing to fully disclose assets valued over 500,000 Hong Kong dollars (including art collections).
At the same time, CVC began pursuing Zhang Lan’s overseas assets in the Federal Court in New York and successfully obtained proceeds from the sale of Zhang Lan’s New York apartment on West 53rd Street, as well as attempting to seize renowned artworks, including the aforementioned two masterpieces, to enforce the judgment.
According to court documents, “Due to Zhang Lan’s asset concealment, these two paintings are among the few remaining assets available to assist in satisfying the arbitral award if liquidated.”
In May 2014, Zhang Lan anonymously acquired these two paintings for a total of 29.1 million US dollars. Two weeks after winning the bid, Zhang Lan urgently registered a shell company, Apex Lead Investment Holdings Limited, in the Seychelles and requested Sotheby’s to modify the invoice and payment terms, changing the buyer’s name from Zhang Lan to Apex, solely owned by her son, Wang Xiaofei.
CVC accused Zhang Lan of setting up Apex to hide assets. Bank records revealed that the funds used to purchase the paintings actually originated from an account held by Zhang Lan under the name of Success Elegant Trading Ltd. at Credit Suisse Bank in Singapore, and the funds were later transferred through Wang Xiaofei’s account to Sotheby’s in New York.
In the asset disclosure affidavit submitted to the Hong Kong court, Zhang Lan claimed to have few high-value assets in her name and denied media reports regarding her purchase of the aforementioned artworks.
In November 2019, CVC applied to the Federal District Court in the Southern District of New York to seize the two paintings still held at Sotheby’s headquarters in New York. Apex later joined the lawsuit, claiming to be the rightful owner as a legitimate buyer of the paintings and arguing that CVC’s fraudulent conveyance accusation had exceeded the statute of limitations.
On March 24, 2026, the Federal District Court in the Southern District of New York issued a final ruling confirming the seizure of the two paintings. The court affirmed that despite the name change on the invoice, internal Sotheby’s records clearly identified Zhang Lan as the actual customer, and all the purchase funds originated from an account controlled by Zhang Lan.
The court also determined that Zhang Lan’s transfer of the painting rights to Apex constituted a “fraudulent conveyance,” with the purpose of placing assets beyond the reach of creditors.
According to Caixin, a mainland media outlet, this ruling paves the way for CVC to apply for an “order for asset delivery” in another civil lawsuit without hindrances. Once the order is obtained, these two paintings will go through the auction process for monetization, formally used to repay debts.