It must have seemed, at the time, a fairly simple deal.

In late 2023, Elizabeth Mugrabi, known as Libbie, a Manhattan socialite, wanted to take out a $3 million loan.

She needed the money to buy a home in the south of France, she told The New York Post, though her lawyer would say later that she merely wanted “to get her finances in order.”

Ms. Mugrabi may have seemed cash poor, but she was art rich, having received valuable works in her divorce from the art market titan David Mugrabi. She approached a lending company — Art Capital Group — which specializes in loans that use artworks as collateral. The two sides agreed that to secure the short-term loan Ms. Mugrabi would put up a 1982 masterwork by Jean Michel Basquiat that depicts a haloed and Christ-like figure, with a black crescent moon overhead.

Things grew more complicated when it came time to pay what the company called in court papers a “small $12,500 due diligence fee” to cover work necessary to secure the loan.

Ms. Mugrabi addressed the fee not by writing a check, but by putting up as collateral another valuable painting from her collection. This time, it was one in a series of Andy Warhol portraits of Jacqueline Kennedy Onassis that she says is worth at least $1 million.

And while the Basquiat stayed with her, Art Capital removed the Warhol from her home.

Ultimately, Art Capital did not give Ms. Mugrabi the loan, pointing to concerns about her credit worthiness. Nor did it give back the Warhol, citing the loan agreement. The relationship between the parties has been deteriorating ever since.