Masterworks Approves $1 Million Net Sale of Elizabeth Peyton Painting; Investor Payout Pending

Masterworks Vault 4, LLC reported on October 21, 2026 that Series 391, whose only asset is a 1996 Elizabeth Peyton oil on board, approved its sale to an undisclosed buyer for $1,000,000 net of fees and commissions. The proposed net proceeds are $278,000, or 38.5%, above the $722,000 carrying value in the series' June 30 semiannual report. The filing is careful about what has and has not happened: the Company approved the sale on October 15, no money had been received at the report date, and the series will distribute and dissolve only once the full price arrives.

The promising number is the sale price; the unresolved one is the payout. The series first pays or provides for its liabilities, costs and expenses, and the Vault operating agreement's distribution terms, including the administrator's profit share, apply before the remainder reaches Class A holders. The filing promises a further Form 1-U describing the distribution when the sale completes.

What the filing shows

The report is filed under Item 1, Fundamental Changes. An unaffiliated gallery was appointed exclusive selling agent under a Consignment Agreement dated October 5, 2026, running to October 30, on the condition that the Company receive at least a minimum net proceeds amount, with any offer subject to the Company's written approval. On October 15 the consignee presented an offer documented by an invoice it countersigned, and the Company approved it. The invoice and agreement are attached as Exhibit 6.1 with the purchase price, commission, minimum net proceeds, consignee and buyer redacted; the invoice's visible line is 'Total Due: USD $1,000,000'.

The execution risk is stated plainly. The buyer has not paid and may be given up to thirty days from the invoice to do so; the consignee sells in its own name, the Company has no agreement with the buyer and cannot enforce the sale directly; and title passes, and the painting leaves the Company's chosen storage, only when the full price has been received. The consignee is not liable if the buyer fails to pay.

Series 391 on the books

Vault 4's semiannual report for June 30, 2026 carries the series' figures. The artwork's carrying value is $722,000. Class A ordinary shares outstanding were 36,229, issued at $20.00, after 36,100 at January 1, 2025; alongside them sit 1,000 Class B shares held by the administrator and noncontrolling-interest shares issued for management services, which rose from 245 at January 1, 2025 to 932 at June 30, 2026, the mechanism by which Masterworks' annual fee is paid in shares rather than cash. Series 391 recorded no income in either half-year and a loss equal to the management-services shares issued.

Masterworks' own estimated net asset value for the series moved down over the last year of reports: $21.41 per Class A share as of September 30, 2025 and $20.68 as of June 30, 2026, against the $20.00 issue price. The series' shares were being marketed by January 16, 2024, when Vault 4 attached their offering materials to a Form 1-U; a close at the end of October 2026 would come about two years and nine months after that. That is time since offering, not the holding period of any investor, who may have bought later on the primary offering or on the secondary market.

What the proceeds have to pass through

The $278,000 premium is measured against carrying value and before everything the operating agreement puts ahead of Class A holders: the series' liabilities, the costs of the sale and the wind-up, and the administrator's profit share on a sale. As an illustration only, $1,000,000 spread across the 36,229 Class A shares would be $27.60 a share before any of those deductions and before the claims of the management-services and Class B interests; the distribution per share will be known only from the follow-up filing. AltStreet's review of Masterworks records the liquidation waterfalls filed with 32 earlier sale reports, where the multiple on invested capital ran 1.03 to 1.86 with a median of 1.27 and per-share distributions ran $20.63 to $37.19 against the $20.00 price.

The week's other Vault 4 reports are context, not consequence. On October 15 the entity disclosed that its offering statement had expired on August 23 and that it kept accepting subscriptions afterward, with a possible rescission liability for those sales; the filings do not say whether Series 391 sold shares after the expiration. On October 20 it reported that PPEX trading of its shares ceased on October 19 in favor of a Masterworks bulletin board that posts interest but does not match orders. A completed painting sale would return cash to Series 391's holders without their needing to find a buyer on that board.

Why it matters

For holders of Series 391, the questions are the net figure and its timing. The filing commits to a further report describing the distribution; until then the only stated number is $1,000,000, and that number is conditional on a buyer the Company cannot compel and whose obligations it does not know. For holders of other Vault 4 series, this is a prospective exit, not yet part of the platform's realized record, and it arrives in the same week the secondary venue changed.

What the filing does not show

The filing does not name the buyer, the consignee or the commission, does not state the minimum net proceeds the Company required, and does not say whether the buyer's obligation is conditional. It does not give the date the series bought the painting or the price paid beyond the $722,000 carrying value, does not state the series' current liabilities, and does not compute the distribution per share. AltStreet has not seen the unredacted invoice or agreement.