Thursday, April 05, 2007

No Deal (UPDATED 2X)

The Tennesse Attorney General has called off the proposed deal between Fisk University and the Georgia O'Keeffe Museum. The AP report is here. Here's the basic background. Short on cash, Fisk announced it was going to sell a couple of paintings from its Stieglitz Collection, including an O'Keeffe painting called “Radiator Building – Night, New York.” The O'Keeffe Museum challenged the sale on the grounds that it was a condition of the original gift that the collection not be broken up. The case was heading towards a trial when a settlement was announced in February: the museum would drop its objections to the sale of the two paintings, in return for which it would get to be the buyer of "Radiator Building" for a bargain price of $7 million. But the deal was put on hold for 30 days in order to give the university a chance to come up with an alternative plan for solving its financial problems that didn't involve losing the paintings. No such plan emerged, but Fisk did report to the Attorney General that it had received "one or more offers at or in excess of $20 million" for the painting. This apparently convinced the Attorney General that the $7 million price was too much of a bargain -- in effect, that Fisk was "paying" too much to settle the lawsuit -- and he withdrew his approval. This does not mean, as the headline of this piece mistakenly suggests, that Fisk has won "backing to ... sell O'Keeffe painting for top dollar." All it means is the case goes back to court, where, if the museum prevails, the university won't have the right to sell the paintings at all, thereby missing out on $7 million plus however many millions the other painting would have brought 0n the open market.

You can read the Attorney General's letter here. Lee Rosenbaum reports that the Chancery Court has set a trial date for July 18. Richard Lacayo floats some alternative settlement ideas. No word yet from the museum about their next move. Stay tuned.

UPDATE: The New York Times has a good summary this morning.

UPDATE 2: Jonathan Marx has a piece in today's Nashville Tennessean headlined "Fisk can get better deal, art pros say." Well, yes, of course it could get more for the painting than the museum was going to pay under the now-scuttled settlement -- but that's the whole point of a settlement. Each side gives something up. Marx writes that "several experts have suggested that if the museum truly wants the painting, it should be ready to pay what it's worth" -- but to say that is to say that the museum should get nothing in exchange for dropping its claim. The Attorney General's position seems to amount to saying it was fine for the museum to get the painting at a discount, just not too large a discount. But then why didn't they get an up to date appraisal before signing off on the deal initially? It was obvious to lots of people at the time that the two-year old appraisal that was used was badly outdated. It was no secret when this deal was reached that the O'Keeffe was a $20 million painting.

One other odd thing about the reaction to this latest news. If the work ends up selling on the open market, there's a chance it will end up going not to the O'Keeffe Museum but to, say, Bentonville, Arkansas or, even worse, "over the commode of some Russian kleptocrat." Is that really what people want?