"It's a mess"

From the Seattle Times:

"Former Seattle art dealer Kurt Lidtke, who was convicted of stealing artworks and still owes victims more than $400,000, left a tangle of deception in his wake that may never fully be unraveled. The scale and duration of his misdeeds are unprecedented in the Northwest art trade and have rattled a community accustomed to doing business on trust and a handshake. Lidtke is set to be sentenced today in King County Superior Court, facing up to 43 months in prison for selling consigned artworks without paying the owners .... He was charged last year with 20 counts of theft, including failure to pay state sales tax, and he pleaded guilty to nine counts."

The article asks, "So where does that leave Lidtke's victims?" and goes on to correctly point out that "even when artworks are located, ... it may not be easy to recover them. That's because if the original owners authorized Lidtke to sell the works for them on consignment, the buyer can claim legal ownership. Then it becomes a collection problem [against Lidtke] for the original owner."

Benezra on Fractional Gifts and Deaccessioning (UPDATED)

Richard Lacayo has posted an excellent two-part interview with SFMOMA Director Neal Benezra, which includes the following:

LACAYO: Everybody complains about the change in the federal tax laws governing fractional gifts. [This is an arrangement whereby collectors give a museum a partial ownership interest in a work, with the right to dislay the work for a part of each year, while the collector takes a partial tax break.] Has that had a big impact on you?

BENEZRA: We have more fractional gifts than any museum in the country, something like 800. That change has had an unbelievably negative impact on our acquisition program, a profoundly negative impact. The difference in the number of gifts from one year to the next has dropped off by 80% or something.

He also calls deaccessioning "the third rail of American museums": "You have to be very careful how you do things. But I've seen how it can be done well."

UPDATE: I didn't realize the interview wasn't finished. There's a part three up today, every bit as interesting as the first two, and which includes the following:

LACAYO: What one thing would make your job easier?

BENEZRA: I wish the government would reassess this fractional gift thing. This was something that was not broken and didn't need to be fixed. There was not abuse. Certainly not here there wasn't.

And something has to be done about insurance. We're in earthquake territory. We're in a 10-year-old building that's as rock solid as could be. But because of our geography, we're having a terrible time with insurance. ... There's a federal indemnification program for international loans. What we're lobbying very hard for now is that the indemnification program should work for domestic loans as well.

Not Over (UPDATED 2X)

The Fisk University deaccessioning controversy just got a little more interesting. From the AP tonight:

"Lawyers for the Georgia O'Keeffe Museum ... filed a legal challenge late Monday that seeks to prevent Fisk University from selling a stake in the collection donated by O'Keeffe .... The cash-strapped school wants to sell a 50 percent share of the collection to a museum founded by Wal-Mart heiress Alice Walton for $30 million .... The O'Keeffe Museum ... referred in its filing to an earlier finding by Chancellor Ellen Hobbs Lyle that O'Keeffe's 'donation was not given to Fisk to use as a source of revenue.'"

Lyle had promised an expedited ruling on the proposed sale to Walton's Crystal Bridges "later this month."

UPDATE: According to this article in this morning's Arkansas Democrat-Gazette, the Tennessee Attorney is also opposing the sale, "saying that Fisk first wanted to sell only two paintings and now the proposed transaction with Crystal Bridges includes the entire collection."

UPDATE 2: Theo Emery has more in Wednesday's New York Times: "Fisk’s president, Hazel O’Leary, said the university was being 'held hostage' by the litigation. 'Their intention is to bleed us to death,' she said. 'They know that time is not on our side here.'"

Art and the Nobel Prize

Three American economists won the Nobel Prize in Economics today for their work in the area of "mechanism design." GMU's Alex Tabbarok uses the following example to try to explain what mechanism design is:

"Suppose that you are selling a rare painting for which you want to raise the maximum revenue. There are two potential buyers, Tyler, who values the painting at $100,000, and Alex who values it at $20,000. The problem would be simple if you knew this information - you would then set the price at $99,999 and Tyler would buy[,] maximizing your revenue. But how much Tyler and Alex value the painting is their own private information. How then should sell the painting? One possibility that springs quickly to mind is an auction. In a standard English open-cry auction Alex and Tyler will bid for the painting and the bids will keep rising until Alex is forced to drop out at $20,001. Thus the auction earns you $20,001. Not bad but is this the maximum revenue possible? Remember that Tyler values the painting at $100,000 so you could be leaving a lot of money on the table. What else can you do?"

Read the rest of his post to find out.

"Even in plain daylight, the French cannot be trusted with their cultural treasures"

Benjamin Ivry has some further details on one of several recent cases of art vandalism in France:

"On November 16, a verdict will be handed down in the much-publicized trial of Rindy Sam, a Frenchwoman who identifies herself as an artist. Last July, Ms. Sam kissed a painting by American modernist Cy Twombly, which resides in a special collection at Avignon’s Museum of Contemporary Art. Ms. Sam smeared the white canvas with lipstick. Since her oral tribute, museum technicians have been unable to remove the lipstick stain from the canvas, previously valued at $2.8 million. Ms. Sam has explained that all she did was offer a kiss as a 'gesture of love.' The museum and the collector who retains ownership of the painting are not endeared, demanding compensation to the tune of over 30,000 and 2 million euros respectively. Additionally, a prosecutor wants to fine Ms. Sam 4,500 euros for her action. Only Twombly himself ... has kept his compensation demand to the scale of a state fair kissing booth, asking for just a single euro as 'symbolic' reparation."

Through the grapevine

Nonprofit lawyer Gene Takagi spoke with a senior staff person at the Association of Art Museum Directors and reports that changes to the fractional gift laws may be on the way.

Bio-art Guilty Plea

A professor of genetics at the University of Pittsburgh who was facing federal charges for sending bacteria to artist Steve Kurtz (the subject of the recently released movie “Strange Culture”) has pleaded guilty to a misdemeanor charge. As part of the deal, he agreed to testify against Kurtz in his upcoming trial. Story in The New York Times here.

Art and Vandalism

Michael Kimmelman: "It’s tempting to look for a grand, unified theory of vandalism, but the specific motivations of the people who attack art are clearly as diverse as the objects they choose to hurt."

Joint Authorship Decision

Major joint authorship decision in the Second Circuit this week in Davis v. Blige. Summary in the New York Law Journal here. Shorter summary from Eugene Volokh: "You can get a nonexclusive license up front from just one [co-owner], without the others' permission. But once you infringe you can't get a retroactive license from just one -- you'd have to get forgiven by all of them."

Bill Patry says the decision is "disastrous" and is hoping for a do-over.

Mistakes were made

You may have heard that, when four soon-to-be deaccessioned paintings were removed from the Maier Museum at Randolph College recently, a local police officer, on hand for security, told a student there had been a bomb threat at the museum. Story here. Yesterday Lynchburg Commonwealth Attorney Michael Doucette issued a statement on whether criminal charges will be brought against the officers involved. (Answer: No. "I see nothing in the facts of this case that suggests that the officer in question acted out of malice or with any criminal intent. ... In reaching this conclusion, I in no way condone what the officer did. The Lynchburg Police Department has appropriately dealt with this officer administratively. Additionally, the Lynchburg Police Department has publicly acknowledged that the officer made a mistake....")

"Trade Your Picasso for a Degas - And Pay No Tax"

That's the headline of a piece that ran in yesterday's New York Law Journal [$] about "like-kind exchanges" under Section 1031 of the Internal Revenue Code. It began: "Can I really sell or trade my art and pay no tax? Well, Yes! You can sell your precious artwork now and later exchange it for another artwork without paying capital gain taxes on the sale."

Well, maybe. This is a really complicated question, but let me just say that it's not nearly so clear that Section 1031 applies to exchanges of art. I'll mention just two issues. First, the statute limits such exchanges to property held for productive use in a trade or business or for investment. It's not at all clear that the typical collector holds his artwork as an "investor." (Section 1031 does not define the term.)

Second, to qualify under Section 1031, the work must be exchanged for "like-kind" property. It's unclear how that applies in the art context. The IRS has ruled, for purposes of a different section of the Code (Section 1033), that lithographs were not "similar or related in service or use" to artworks in other media. Would the same result apply under Section 1031? Can an Abstract Expressonist painting be exchanged for an Old Master painting? Is that more "like-kind" than a contemporary painting and a contemporary drawing? No one really knows for sure.

So it seems to me that, in many cases at least, a collector will have a pretty heavy burden of showing (a) that he holds the artwork as an investment and (b) that he's exchanging it for like-kind work. There are also a number of technical requirements that have to be met, including filing IRS Form 8824 disclosing the transaction. On top of all that, the Treasury Department just a few weeks ago issued a report urging more scrutiny of 1031 exchanges generally ("In the wake of the Treasury report, 'I think you can expect increased IRS enforcement and oversight activity,' said Louis Weller, national director of real-estate transaction planning for Deloitte Tax LLP in San Francisco. IRS officials are 'aware of a lot of pushing-the-envelope activity by taxpayers.'").

California Right of Publicity Law Enacted

The Los Angeles Times reports that Gov. Schwarzenegger has signed the pending bill to expand publicity rights of dead celebrities. More here from NPR's All Things Considered, which sums up the law as "essentially say[ing] that famous people can pass on the rights to their image to anyone they want — and the right exists even if they died decades ago."

Chase v. Stendhal

The New York Law Journal publishes the decision [$] in artist Saul Chase's breach of contract victory, in New York Supreme Court, over Stendhal Gallery. Chase entered into a one-year agreement with the gallery, but, when they failed to pay him his share of the proceeds from three sales, he terminated the agreement. The gallery argued that "the parties agreed to put [Chase's] share of profits from the sales of his works towards the costs of maintaining" his exhibition, but, on summary judgment, the Court held that was "contradicted by the plain language of the Agreement," which provided that the only costs Chase was responsible for were framing and a share of transportation costs. The Court also held that Chase was acting within his rights when he terminated the agreement as a result of the gallery's breach.

One other element of interest. Maya Stendhal disputed that she is personally liable under the agreement because she signed for Stendhal Gallery, not in her individual capacity -- she signed above a signature line which said "for Stendhal Gallery." The Court rejected her argument, for two reasons: (1) there was no indication anywhere in the agreement that Stendhal Gallery is a corporate entity ("corp.," or "inc.," or "ltd.") and (2) there was no evidence that Stendhal Gallery was even a corporate entity (the gallery was incorporated under the name "Stendhal New York, Inc.," not "Stendhal Gallery").

Is a Gauguin nude sexual harassment?

Eugene Volokh points out that the University of California's online Sexual Harassment Training makes a distinction between "artwork by a recognized artist" (which is generally not considered sexual harassment) and run-of-the-mill "explicit pictures" (which can be, "even in your personal work space"). He says that's "a fairly accurate statement of what courts are likely to do" (though, as he notes in this law review article, there have been a number of harassment complaints over art by recognized artists), but thinks this "pose[s] serious First Amendment problems ..., both related to the law's vagueness and to the law's breadth."

Forgery Arrest

From this morning's New York Sun:

"A Massachusetts woman has been arrested on charges that she sold a forged Milton Avery painting that ended up in a New York gallery. Angela Hamblin ... was arrested yesterday morning on a charge of mail fraud related to the forged Avery .... The case will be prosecuted in U.S. District Court in Manhattan. Prosecutors say that in April, a New York gallery purchased the painting for $200,000. The purported Avery was titled 'Summer Table, Gloucester,' according to a criminal complaint filed by a veteran theft investigator at the FBI, James Wynne. A later inspection by the gallery, which is not identified in legal papers, disclosed that the painting was not authentic. The complaint said the painting had come from a North Carolina dealer who had purchased it on eBay from Ms. Hamblin .... Ms. Hamblin is additionally accused of trying to palm off other forgeries as the works of famous artists, including Franz Kline, J.M.W. Turner, and Juan Gris."

Hamptons Heist

From yesterday's New York Post:

"A crew of amateur art thieves stole roughly $600,000 worth of paintings from the Hamptons mansion of a former Revlon CEO and torched the home to cover up the heist, prosecutors said yesterday. Officials said the group's ringleader ... began working as a caretaker at the $6 million Quiogue mansion of businessman Jerry W. Levin during a renovation project in late 2005."

The scheme fell apart when the thieves began to contact art dealers to try to sell the pieces. One of the dealers they contacted had originally sold one of the stolen paintings to Levin and had worked with his insurance company to value the works.

Cheeky

From the Washington Post:

"A Richmond area high school art teacher who was fired ... after officials learned he created paintings with his bare buttocks and other body parts has sued school officials. Stephen Murmer said in a federal court complaint filed [last week] in Richmond that his firing from Monacan High School ... violated his First Amendment rights. The lawsuit, filed by the American Civil Liberties Union, seeks unspecified damages. School officials investigated Murmer after seeing a video on the Web site YouTube in which Murmer, clad in a swimming thong and a Groucho Marx fake-nose mask, demonstrated how he applies paint to his backside and presses it onto a canvas."

Needless to say, this has made the nation's headline writers very happy ("Va. Teacher Fired for Buttocks Art Sued," "Teacher Fired For Producing Paintings With Buttocks," "'Buttocks' Artist Sues After His Odd Work Gets Him Fired," "ACLU files lawsuit for 'the butt artist'").

The complaint is here. You can see the YouTube video here, and a sample of his work here. Murmer has a website (buttprintart.com, of course) here.

Shields v. Gross

Peter Schjeldahl's review of the Richard Prince retrospective now up at the Guggenheim refers to Prince's "1983 photograph of an infamous Garry Gross photograph ... of a naked Brooke Shields, aged ten, her prepubescent body oiled and her face given womanly makeup," and says Prince "enjoyed the spectacle of Shields’s failed later effort, in a lawsuit, to quash Gross’s picture, which her mother had authorized for four hundred and fifty dollars." The New York Court of Appeals decision in that case is here. The consents her mother had executed provided, in pertinent part:

"I hereby give the photographer, his legal representatives, and assigns, those for whom the photographer is acting, and those acting with his permission, or his employees, the right and permission to copyright and/or use, reuse and/or publish, and republish photographic pictures or portraits of me, or in which I may be distorted in character, or form, in conjunction with my own or a fictitious name, on reproductions thereof in color, or black and white made through any media by the photographer at his studio or elsewhere, for any purpose whatsoever; including the use of any printed matter in conjunction therewith.

"I hereby waive any right to inspect or approve the finished photograph or advertising copy or printed matter that may be used in conjunction therewith or to the eventual use that it might be applied."

"The Walton Effect"

Lee Rosenbaum has an article in the Wall Street Journal today on Wal-Mart heiress Alice Walton's role in the recent deaccessioning controversies involving Thomas Jefferson University, Fisk University, and Randolph College.

"My whole body of work involves trespassing"

The Providence Journal had a story last week on artist Michael Townsend, who constructed "a secret studio apartment in a storage area in the Providence Place mall, where he and others stayed on and off for nearly four years." He ended up under arrest, but pleaded no contest to trespassing and was sentenced to probation. The paper's editorial board is "glad the law will treat the squatter lightly. ... The apartment’s amusement value far outpaces any loss of face to the mall or its crack security team — whose snookering only goes to show that guards have higher priorities and real criminals to protect us from."

Townsend has a web site about the project here. Greg Allen notes another body of work by Townsend.

Morning Vandalism News

French police have arrested five people in connection with the Monet incident at the Musee d'Orsay over the weekend. Reuters reports that they're all between 18 and 19 years old.

Meanwhile, The New York Times reports this morning that French prosecutors have requested a $6,300 fine and a civics course for "a woman who planted a lipstick-red kiss on an all-white painting by the American artist Cy Twombly." The woman says, "It was an act of love; when I kissed it, I wasn’t thinking. I thought the artist would understand." According to the Times, "a verdict is expected in a few weeks." Earlier post here.

More Vandals

On the heels of last week's incident at the Musée d'Orsay, Carol Vogel has the following in today's New York Times:

"A grainy video of four masked vandals running through an art gallery in Sweden, smashing sexually explicit photographs with crowbars and axes to the strain of thundering death-metal music, was posted on YouTube Friday night. This was no joke or acting stunt. It was what actually happened on a quiet Friday afternoon in Lund, a small university town in southern Sweden where 'The History of Sex,' an exhibition of photographs by the New York artist Andres Serrano, had opened two weeks earlier."

Here is an old review of the show from ArtForum. Here is more on Serrano.

Authentication Suits

Kate Taylor had a great piece in Friday's New York Sun on the recent spate of lawsuits against art authentication boards. It begins:

"Few art historical issues are as contentious, or have as dramatic and immediate effects in the marketplace, as those of attribution and authentication. In fact, lawsuits are so common that many experts require owners to sign a statement promising not to sue before they will even look at a work and offer an opinion."

She goes on to note that "in France, the principle of droit moral gives an artist — and his heirs, for 70 years — substantial control over his name and his works, including the right to challenge the authenticity of a work purporting to be his. But in America, no one, technically not even the artist himself, has a legal right to decide whether a work is authentic or not. Instead, the power of an expert or an appointed board of experts follows only from their general credibility and knowledge of the artist's oeuvre."

Oops

Via ArtsJournal, I see that The Art Newspaper is reporting that Christie's "has unlawfully sent a [$6 million] Rubens masterpiece to America, in breach of UK export regulations. In an unprecedented move, Culture Minister Margaret Hodge has deferred an export licence for [the work], despite the fact that the painting is already in New York. UK buyers are now being offered an opportunity to match the price."

Christie's says "a human error led to the accidental shipping of the picture to a client without completion of the appropriate export licensing process." To which Derek Fincham responds:

"Some error. One would think a work of this magnitude would be double checked. Christie's is subject to criminal penalties .... A fundraising effort may now begin. It's uncertain whether the funds can be raised ... or even if the New York buyer would consider selling the work. If she does not, the work will have certainly lost value, and I'd anticipate Christie's would be subject to a civil suit brought by the buyer. Though the work cannot be recovered because the US does not enforce the UK export restrictions, it will not be able to be sold or even travel to Europe in all likelihood."

More from Callen Bair here.

Vandalized (UPDATED)

From tomorrow morning's New York Times:

"Intruders broke into the Musée d’Orsay early Sunday and one of them damaged a work by ... Claude Monet, the latest in a series of acts of vandalism and thefts at cultural sites in France. Christine Albanel, the minister of culture, said the intruders left a tear close to four inches long in the painting 'The Argenteuil Bridge,' from 1874. ... She said the intruders, believed to be four men and a woman, appeared drunk and 'left various bits of filth' before 'one of them stuck a fist into the magnificent masterpiece by Monet.' The alarms sounded and museum personnel arrived quickly, but the intruders were able to flee, Ms. Albanel said."

Lee Rosenbaum has some suggestions for Ms. Albanel: "How about toughening security, so that drunken revelers can't so easily enter one of France's premier art museums, let alone manage to vandalize a masterpiece and escape, despite the sounding of an alarm?"

UPDATE: Callen Bair spots an "embarrassing" trend:

"In August, thieves raided the Musée des Beaux-Arts in Nice and made off with four canvases, including Monet's Cliffs near Dieppe and Alfred Sisley's The Lane of Poplars at Moret. It wasn't the first time these paintings had been lifted: The Monet and Sisley were stolen from the same museum in 1998 in a heist masterminded by its own curator and two accomplices; the Sisley had also been taken from Marseille twenty years earlier. August's theft was not even a month after a woman kissed a Cy Twombly painting on view at the Collection Lambert in Avignon, leaving a lipstick smudge on the white canvas .... And last year a man assaulted a reproduction of Marcel Duchamp's original urinal from 1917 with a hammer at the Pompidou Centre after urinating on the same piece at an exhibition in 1993 ...."

Hammer Time (UPDATED)

At the Wall Street Journal Law Blog, Peter Lattman describes "a bubbling trademark spat" between the Hammer Museum in Haines, Alaska, and the Hammer Museum in Los Angeles:

"The Alaska Hammer, created in 2000, is dedicated to the oldest human tool .... The museum took in $8,104 in revenue last year (half from T-shirt sales). The L.A. Hammer, the renowned fine-art musuem formerly known as the Armand Hammer Museum of Art, dropped the 'Armand' and now calls itself the Hammer Museum. In 2006, it booked about $10 million in sales. Last year, the L.A. Hammer applied to trademark the name .... When Dave Pahl, the founder of the Alaska museum, found this out this past summer, he filed his own trademark application .... Both applications are pending at the U.S. PTO."

Law professor Eric Goldman is quoted as saying the two can coexist with the same name if the PTO determines there is no likelihood of confusion.

UPDATE: Professor Bainbridge has the backstory on the L.A. Hammer.

Recovered (UPDATED)

The BBC reports that police in Glasgow have recovered a $60 million Leonardo da Vinci painting that was stolen four years ago. Much more from Callen Bair, who's "sure there's a screenwriter already drafting a script."

UPDATE: Callen adds in an update that "not one, but two, of the [four men arrested in connection with the theft] appear to be lawyers."

Strange Culture

The Steve Kurtz story makes it to the big screen today. The New York Times reviews it here. From the review:

"In 2004 Steve Kurtz ..., an associate professor of art at the State University of New York, Buffalo, was preparing an exhibition on genetically modified food for the Massachusetts Museum of Contemporary Art when his wife, Hope ..., died in her sleep of heart failure. But when paramedics noticed petri dishes and other scientific paraphernalia in the home, they alerted the F.B.I.; within hours Mr. Kurtz found himself suspected of bioterrorism, his home quarantined and his wife’s body removed for autopsy."

For background on the Kurtz story, see here. Much more from the New York Sun, which says a trial "is expected to convene in 2008."

Dealer sentenced

Jason Edward Kaufman reports in The Art Newspaper that Manhattan dealer Edward Merrin was sentenced to one year’s probation and eight months of home confinement, and ordered to pay about $50,000 in fines/restitution, in a federal case that charged him and his son Samuel with defrauding a client out of millions of dollars. The case against the son continues. Kaufman says that "in light of the scale of the allegations, the sentence is being seen by some as a 'slap on the wrist.'"

As Kaufman describes the scheme, the dealers entered into an agreement to sell the client's antiquities according to a "cost-plus" arrangment: "This meant that the [client] would pay the Merrin Gallery’s cost of acquiring the art plus an agreed commission ranging from 10% to 20% .... The indictment alleges that by misrepresenting the gallery’s acquisition cost, the Merrins fraudulently increased both the 'cost' component and commission component of the prices they charged the [client]. The government prosecuted the Merrins for mail fraud, which makes it a felony to transmit fraudulent information across state lines."

Right of Publicity Update

USA Today had a story this week on the ongoing battle over posthumous rights of publicity. It begins: "The use of Marilyn Monroe's iconic face to sell merchandise has prompted her only heir to push for laws giving estates of deceased celebrities sole control over marketing their famous personas. The feud is playing out in New York and California. It pits the rights of estates to approve any use of the celebrity's image against the First Amendment right to use images and words of famous people for purposes such as research and art." And it includes this summary of the legislative state of play:

"In New York, the right to market the images dies with the celebrity. A bill to hand estates power over the images stalled .... The bill likely will be reintroduced.

"In California, where lawmakers are more sympathetic to entertainment industry issues, newly passed legislation clarifies and expands a state law that allows estates to control the marketing of deceased celebrities' images. Gov. Arnold Schwarzenegger has not said whether he will sign the bill."

Art and Kids

Still catching up on things I missed over the last couple of weeks, Kelly Crow had an interesting article in the Wall Street Journal on kids who are collecting Warhols instead of Beanie Babies. This paragraph caught my eye:

"But there are upsides to mixing kids and fine art. Families can reap potential tax benefits by putting art in a trust set up for their children. The move can side step a federal estate tax of up to 45% of the art's value if children had instead inherited it after their parents die. There are several disadvantages to trusts: If a piece of art is valued at $1 million or more, parents may be taxed when they move the work into the trust. The strategy also could hinder parents from selling or loaning a work."

So I asked Tara Kaplan of our firm's trusts and estates department what she thought. She wrote the following:

"Although, to a great extent, the paragraph is accurate, it's also a little misleading. As you will see from my discussion below, you just can't accurately describe the real tax consequences of putting art into a trust for your children in one paragraph.

"To put the discussion in context, let's start with some basics about our federal estate and gift tax regime. Under current law, $2 million of an individual's estate passes free of estate tax, regardless of the beneficiary. If an individual has made taxable gifts during his or her lifetime, the amount shielded from federal estate tax is reduced by the amount of lifetime taxable gifts up to $1 million. Currently, any amount subject to federal estate tax (beyond the $2 million exemption) is subject to estate tax at a flat rate of 45%. The exemption is set to increase to $3.5 million in 2009. In 2010, the estate tax is scheduled to be repealed. Under the current legislation, however, the estate tax repeal ends in 2011, unless Congress enacts new legislation. This means that, without further legislation, in 2011 (and thereafter) the estate tax exemption and tax rates will return to their pre-2001 levels ($1 million exemption per individual with a top estate rate of 50%). Although no one can predict what Congress will do, most estate tax practitioners believe that new legislation in some form will be enacted, which leaves us with a very uncertain environment for any gift and estate tax planning at this time.

"In contrast to the federal estate tax, the lifetime gift tax exemption is not set to change. Rather, the lifetime gift tax exemption is frozen at $1 million for individuals and $2 million for married couples who split gifts. This amount is cumulative over an individual's lifetime. (If certain requirements are met, an individual also may make tax-free annual gifts of $12,000 -- or $24,00 if married and the gift is split -- indexed for inflation. These 'annual exclusion' gifts are in addition to, and do not use up any part of, the lifetime gift tax exemption amount.)

"With those basics in place, let's turn back to the Journal article:

Families can reap potential tax benefits from putting art in a trust set up for their children. The move can side step a federal estate tax of up to 45% of the art's value if children had instead inherited it after their parents die.

"Although such a lifetime transfer to a trust, if properly structured, would effectively sidestep a 45% estate tax, we must also consider the potential gift tax consequences. If a gift tax were assessed on the transfer to the trust, we'd end up prepaying transfer taxes (albeit, because of the difference in the way gift taxes and estate taxes are applied, the effective gift tax rate would be lower than the estate tax rate). While it is true that a gift removes subsequent appreciation from the donor's estate, given the uncertainty of the future of the estate tax, there may be no estate tax liability to be paid at the individual's death at all. In that case, a completely unnecessary gift tax would have been incurred.

"This also leaves out income tax considerations. The income tax implications could be significant if the trust (or the child beneficiary) ultimately determines to sell the art. One consequence of transferring property to a trust is that the child (or the trust created for the child's benefit) will receive the property with a 'carry-over' basis. Generally speaking, 'carry-over' basis means that the donee of the gifted property has the same cost basis as the donor; it simply 'carries over' when the gift is made. If the art has appreciated in the hands of the donor/parent and if a gift tax is paid with respect to the gift, this carry-over basis is adjusted upward by the portion of the gift tax attributable to the appreciation element of the gift. If the artwork has appreciated above the basis of the work in the hands of the donee/child (or trust), if and when the child (or the trust) sells the artwork, a 28% federal capital gains tax liability (plus any state taxes) would be incurred on the gain. By comparison, under the current estate tax regime, if the child inherits the property at the parent's death, the basis would be 'stepped-up' to the fair market value at the time of the parent's death and the capital gains taxes on any subsequent sale would thus be lower or even eliminated.

"Continuing with the article:

If a piece of art is valued at $1 million or more, parents may be taxed when they move the work into the trust.

"Again, that statement is true, but it gives an incomplete picture of the relevant tax consequences. It seems to suggest that the $1 million exemption is applied on a 'piece' by 'piece' basis. In fact, however, since the lifetime gift tax exemption is cumulative, if multiple works of art are gifted during an individual's lifetime, a tax may be assessed on a transferred item even though, taken by itself, it is worth less than $1 million. It is not the value of the particular work of art being transferred, but rather the cumulative value of the lifetime gifts made by the transferor. It is also worth remembering that married couples who elect to split gifts may transfer artwork valued up to $2 million (in the aggregate) without incurring gift tax.

"And finally:

The strategy could also hinder parents from selling or loaning the artwork.

"Not only could the transfer of the artwork 'hinder' the parents from selling or loaning the artwork once it has been transferred to a trust, in order to remove the artwork from the parents' estate, the trust instrument would have to prohibit the parent (though not the trust) from selling or loaning the artwork. The Internal Revenue Code provides that if the transferor retains the right to determine who may enjoy the trust property, the trust assets will be taxed in the transferor's estate. Accordingly, if a parent transfers a work of art to a trust for his or her child, but still has the ability to direct the distribution of the property or indicate who may use the property, the trust asset will be includible in the transferor parent's estate at the date of death value, which would eliminate all the tax-planning benefits of having made the gift.

"So, all in all, it's a little more complicated than that paragraph in the Journal suggests. In addition to the above, let me leave you with three final thoughts:

• Art cannot take care of itself and rarely throws off income. Therefore, when setting up these types of trusts it is not only the artwork that needs to be transferred, but cash as well. One needs to consider whether funds need to be placed in the trust to cover storage, conservation and insurance costs.
• Unless the trust is pre-funded with a large amount of cash to cover expenses for the duration of the trust (which of course also increases the value of the initial gift), it is important that the trust is structured in such a way that future gifts of cash or other liquid assets to cover expenses will qualify for the annual gift tax exclusion (currently $12,000/individual and $24,000/married couple, indexed for inflation).
• Finally, a common misconception is that a parent can transfer the art to a trust and continue to hang the art in the family living room. To remove a work of art from the parent's estate, the parent must relinquish dominion and control over the art and give up all beneficial enjoyment of the artwork. The art should be treated separate and apart from any art which remains within the parent's estate, including for example having it insured under a separate policy in the name of the actual owner, not under the parent's policy. This may be especially difficult while the child is a minor, living under the same roof as the parent. In that case, the safest route would be to hold the art in storage (and not in the parent's storage) until the child is living out on his or her own."

Randolph College News (UPDATED)

Carol Vogel reports in today's New York Times that the board of Randolph College has voted to sell George Bellows’s “Men of the Docks” (1912) and three other paintings this fall at Christie’s. "The auction house estimates that the Bellows alone ... could bring in $25 million to $35 million .... The college’s goal is to raise at least $32 million over all to shore up its endowment and reduce a steep operating deficit." As Christa Desrets explains in the Lynchburg News & Advance, these paintings were not purchased with funds from the Louise Jordan Smith trust (on which see here):

"The college filed legal action in August to determine whether it could sell or share 36 pieces of art ... that were bought from a trust bequeathed in Louise Jordan Smith’s will. None of the four pieces of art to be sold were bought with the trust, [a college spokeswoman] said, so they would not be affected by that action. 'These paintings are without restriction,' she said. 'Two were purchased from the college, and two were gifts. But they don’t have any restrictions on sale.' However, litigation that 11 opponents filed last month in response to the college’s request asks the court to declare that the entirety of the collection is interconnected and should be protected from sale or sharing."

Lee Rosenbaum is not happy ("shame on Randolph College ... for deciding to sell the signature work of its Maier Museum" and "shame on Christie's for abetting this flagrant violation of professional principles of collections stewardship"). Nor is Callen Bair ("a sad way for Randolph to celebrate its museum's centennial") or Richard Lacayo ("a terrible decision").

UPDATE: Lee is now reporting that the director of the college's Maier Museum has resigned.

"What remains of the work mimics nothing so much as a miniature golf course or the median of a shopping mall"

In today's Wall Street Journal, Kelly Crow reports on another VARA controversy, this one involving Yahoo and the artist Sharon Louden. Seems that, in 2001, Louden's "Reflecting Tips, 2001" was installed on the front lawn of the company's Sunnyvale, Calif., headquarters, pairing "real wetlands grass with artificial cattail-like reeds." When the grass recently grew too high, Yahoo sent in a grounds crew to cut it down -- and they ended up damaging the work ("Nearly half of the wires were severed in the process."). It's unclear, but it sounds like there may have been previous damage as well, unrelated to this bout of weed-whacking ("Over the years, other wires had become bent to the ground or twisted into shapes."). Then, last spring:

"Yahoo tore up the lawn. On April 24, Yahoo's legal director, Tad Ravazzini, emailed Ms. Louden's dealer and her lawyer photographs of what they called the 'improved site,' which showed closely mowed green grass where the sedge had been, plus a new border of perennial flowers. ... The artist howled. Mr. Kamm, the dealer, called his lawyer. ... 'What remains of the work,' lawyer John Cahill wrote on April 30, 'mimics nothing so much as a miniature golf course or the median of a shopping mall's parking lot.'"

In a May 14 letter, Cahill "accused Yahoo of breaching its agreement with the artist and violating a number of laws," including VARA. Yahoo responded that it was "'willing to dedicate reasonable resources' to working with Ms. Louden to improve the site," but talks apparently stalled over the summer, and remain stalled today.

I'd be interested to see how the contract dealt with these issues. I'm assuming the surrounding weeds were not included as part of the definition of the work. But did the contract include any specifications about the surrounding site? Sometimes public art contracts provide that the artist gets to approve any proposed alteration of the site "that would affect the intended character and appearance of the work." Is there anything like that here?

"Art is anything you can get away with"

An interesting VARA case out of Illinois, where the Chicago Park District was found liable for destroying Chapman Kelley's "Wildflower Works I" -- a 66,000-square-foot plot of 45 different kinds of flower species. The city apparently argued that the work did not qualify for protection under VARA, but the court rejected that argument. Damages still to be determined. Story in the Chicago Sun-Times here.

The (Art Law) Week

The New York Times "Week in Review" section today is an all art law edition, featuring the Fisk story among others. See here (click on "Arguing Over Art").

Barnes Date

Judge Ott has set an Oct. 19 hearing date on the recent petitions filed by two groups (one, two) opposing the Barnes Foundation's move to Philadelphia.

“He seemed pretty drunk, especially compared to the guy putting him in the cab”

The Aspen Art Museum is being sued under Colorado's "Dram Shop" law for allegedly serving alcohol to a guest who later was arrested for assaulting a local cab driver and making off with his cab. The museum says the claim is meritless because it merely rented out its space to a private group for a party. Full story (including mug shot) in the Aspen Times.

"Liquidity Crisis"

Lindsay Pollock and Philip Boroff have a report at Bloomberg.com on "at least 15" lawsuits that have been filed against Salander-O'Reilly Galleries in the past year. The Maine Antique Digest has been following the story for a while.

He moved them, alright

From this morning's New York Times:

"A mover hired by the city to empty the apartment of a man who died without a will was sentenced in State Supreme Court yesterday to five years’ probation for stealing two sketches by Pablo Picasso. The mover, Nahum Kohen, 39, of Queens, admitted that he took the drawings ... from the home of the man, William Kingsland, after he died in March 2006. Mr. Kohen was hired by the Manhattan public administrator to move Mr. Kingsland’s belongings to a warehouse. ... [A] spokeswoman for the Manhattan district attorney said the Picassos were recovered undamaged."

Previous post on Kingsland/Melvyn Kohn here. I'm still looking forward to the movie.

Dismissed (UPDATED)

From the New York Law Journal:

"Allegations that a prominent Manhattan art dealer appraised a painting by Paul Gauguin at millions of dollars above its value without revealing that the dealer had an 'ownership interest' in the piece have been dismissed."

The decision, by State Supreme Court Justice Emily Jane Goodman, is here. The facts are odd. The plaintiff was informed by an Amir Cohen that the painting was available and, interested in buying, "requested Cohen to procure an appraisal." Cohen recommended Guy Wildenstein, who then provided a written appraisal to Michel Reymondin, "a non-party to this action whose relationship to plaintiff and the transaction at issue in not disclosed in the complaint." Wildenstein appraised the painting at $15-17 million, allegedly without disclosing that his gallery once owned the painting. "The complaint alleges that plaintiff received the Appraisal ..., but does not state how it obtained the Appraisal from Reymondin." Plaintiff paid $11.3 million for the painting, which it then tried to sell at Christie's, but it failed to reach its $12 million reserve. The lawsuit followed, but the claims all failed because there was no relationship between plaintiff and Wildenstein -- the appraisal was obtained by the mystery middle man, Reymondin.

UPDATE: The story gets The New York Post headline treatment: "Art Dealer Easels Out Of Lawsuit."

Now you tell us?

So, as everyone's probably heard by now, MASS MoCA finally decided that maybe it's not such a great idea to exhibit an artist's unfinished work against his wishes after all. You can read all about it in Geoff Edgers's page 1 story in today's Boston Globe.

Let's leave the reckoning of the damage done to artists' rights for another day, and return to our regularly scheduled programming. Like what's in the best interests of the people of the State of Tennessee. Theo Emery has the latest on the Fisk University story in today's New York Times: the school's board of trustees has "agreed in principle" to share ownership of the collection with Alice Walton's Crystal Bridges Museum in exchange for $30 million. The deal is subject to approval by the Chancery Court. More from Callen Bair here. Lee Rosenbaum has a statement from the Tennessee Attorney General, including: "As we have told both institutions, a significant factor in our evaluation will be whether a reasonable alternative emerges that would allow the Stieglitz Collection to remain [in Tennessee] on a full-time basis." I posted some thoughts on the comparative merits of the Crystal Bridges offer here.

"Ponsor rejected that argument, saying an unfinished work didn't qualify for protection under the law"

That's how the Boston Globe described the Court's ruling in Springfield on Friday. (See also Tammy Daniels, iBerkshire.com: "Ponsor ... said an unfinished work doesn't qualify for protection under VARA.")

I'll have (lots) more to say on this angle in the coming days, but for now I just want to note that this is exactly the sort of thing I was referring to in my post, "The Joe Thompson Rules." The fact is that, in pursuing its "victory" over Büchel, MASS MoCA has done serious damage to the cause of artists' rights generally. As Sergio Muñoz-Sarmiento has said, "their claim that their lawsuit against Büchel will not have any negative consequences on legal protection for visual artists and their artworks is ridiculous to say the least. In summation, MASS MoCA has in effect NOT narrowed the legal decision to apply solely to Büchel, but rather guaranteed that all artists are now subject to have their artistic ideas exhibited and shown to the public in any state of completion and at any time by setting the legal and binding precedent that 'VARA does not address the display of unfinished work or the display of materials assembled for use in a work of art.'"

Still Disappointing

More reactions to Friday's ruling in Springfield.

Time Magazine's Richard Lacayo: "As I said in July, the museum's decision to display his work in unifinished state, against his will, 'has always struck me as not so much a reasonable curatorial judgment call as an institutional temper tantrum.' Nothing about Judge Michael A. Ponsor's decision has changed that for me. I find it strange that Ponsor could conclude that showing a half finished work wouldn't harm the artists's reputation. That might be true of Michelangelo's Dying Slave or the fragmentary version of Manet's Execution of the Emperor Maximilian .... But that's because we all have in our minds a pretty full picture of Manet's or Michelangelo's entire output as artists. Buchel is Swiss, and the MoCA installation would have been his first major work in the U.S. Hard as it might have been for MoCA to just suck it up and move on, that's what they should have done."

Portfolio magazine's Callen Bair: "The museum may have the law on its side, but its image has suffered a body blow, and this fiasco is likely to haunt it."

Meanwhile, we filed our Notice of Appeal of Judge Ponsor's decision this afternoon.

Disappointment

Ever since Roberta Smith's piece in last Sunday's New York Times, I've been saying that, if you can't read VARA to prevent the outrage she described, you're not trying hard enough. So needless to say, we were very disappointed by the result of Friday's hearing in Springfield. There wasn't enough time between the end of the hearing and the beginning of the holiday for me to put up a post, but, fortunately, Ed Winkleman pretty much summed up my feelings in the meantime:

"There are two very disappointing decisions behind the ruling by Judge Michael A. Ponsor, who in Federal District Court in Springfield, Mass., concluded that Mass MoCA can exhibit the unfinished work by Christoph Büchel.

"The first was the decision by Mass MoCA to take the issue to court. Fighting for the right to exhibit an unfinished work strikes me as more about the institution or its leadership's bruised egos than any higher ideal, like, say, Mass MoCA's mission. Seriously, what's the core message here? Money invested trumps artistic vision?

"As I've noted before, I'm not without sympathy for any institution that an artist targets as a patsy in a stunt or fails to live up to his/her side of an agreement with (and I'm not saying that's what Büchel did here...I'm just saying there are instances where an institution is right to fight back against an artist), but such fighting has to stop short of saying it's the institution's decision whether or not an unfinished work should bear that artist's name in the public's eye. If Mass MoCA wants to exhibit the work as a creation of their own but 'after Büchel' that's another matter (über-lame, but another matter), but to open the doors to a public, many of whom might not have followed the controversy or understand even the most prominent of wall texts explaining the context, is to willingly misrepresent the work of the artist. And yet, that's exactly what Mass MoCA went to court to claim was their right to do.

"The other disappointing decision, of course, was the legal one. I am not a lawyer, and the decision as reported seemed to be limited to the judge's interpretation of the Visual Artists Rights Act of 1990 and nothing more, but it's a hair-splitting technocratic decision that ignores the spirit of the law, in my opinion. ... How Ponsor failed to interpret the finalization of the piece before the doors can open ... as a 'modification' of the work is beyond me, quite frankly.

"Mass MoCA seems to be trying to move on now that they've won this decision ... but I'm afraid that long-lasting damage has already been done here."

Sergio Muñoz Sarmiento adds:

"This is a death-blow to contemporary artists, national and international alike. On its face, it gives a granting and/or commissioning institution the power to exhibit an artist’s art work without her/his permission unless there is a written agreement to the contrary. Theoretically, the judge’s decision eviscerates an artist’s power to dictate when the artist’s project is in a state where the artist feels comfortable and willing to put it out for public exposure. ... What MASS MoCA and its director, Joe Thompson, should realize, is that although they have been granted the legal right to show Büchel's artwork, this doesn't necessarily mean that they should. Even if they come to their senses and not continue to exhibit Büchel's work, the damage has been done. Unless appealed, the ruling now gives visual artists much less protection under the Visual Artists Rights Act, making this federal law much more useless than before."

And this from the Intellectual Property & Technology Forum & Journal at Boston College Law School: "Although they can now display Büchel’s work, with a notice that it is unfinished, Mass MoCA gains little from the win beyond a reputation for not respecting the artists it chooses to display."

We're still considering our options for appeal, so I'll leave off for now with the Roberta Smith piece I mentioned at the top. She was right that the dispute, for all its sound and fury, really came down to a simple principle:

"If an artist who conceived a work says that it is unfinished and should not be exhibited, it isn’t — and shouldn’t be. End of story."

It's a shame -- for all artists -- that the Court did not agree.

"A Small College, Painted Into a Corner"

Long story in the Washington Post today on the Randolph College deaccessioning controversy. The usual battle lines are drawn. On the one hand, "'If the arts aren't sacred at a liberal arts college, where are they sacred?' asks Laura Katzman, who resigned her tenured position in the art department in April, also in protest over the school's proposal to translate art into finance." And, on the other, "'I don't want to sell the art,' says [a member of the Board of Trustees], 'but if we don't do something, we're not going to have the college, and we won't have any art at all.'" The article does a good job of describing in some detail both the history of the collection and the financial problems the school is facing. (It mostly skips over the legal aspects of the dispute, saying only that "the school filed a circuit court motion recently asking a judge for permission to amend Smith's will to allow it to sell some of the artwork that her estate had donated to the college" -- and even that isn't strictly speaking true in that (a) Smith didn't donate "artwork" to the college, but instead funded a trust to buy artwork and (b) the school's petition asks the court to declare that the terms of the trust (not her will) already permit it to sell or, in the alternative, that they be modified to provide such authority. See here.)

There are some interesting details about the trust. The donor was Louise Jordan Smith, "an accomplished painter" who taught at the school. When she died in 1928, she left "almost everything" (about $28,000) to the school in the form of a trust to be used to "form a permanent collection of art." The college's art staff used those funds to buy 35 paintings -- now reportedly worth more than $40 million, and, in the view of a consultant hired by the school to help sort out its financial difficulties, an asset that can be "leveraged" to inject cash into the school's endowment.

Art Law AG

Lee Rosenbaum points out that attorney general nominee Michael Mukasey has an art law connection. More here from the (newly liberated) New York Times archives.

"What artist will want to work with a museum with a reputation for open hostility towards those it commissions?"

Portfolio magazine's Callen Bair weighs in on MASS MoCA's lawsuit against Christoph Büchel.

"If an artist who conceived a work says that it is unfinished and should not be exhibited, it isn’t — and shouldn’t be. End of story."

So says Roberta Smith in a piece on the front page of the Arts section of Sunday's New York Times. It begins: "When a museum behaves badly, it’s never pretty. But few examples top the depressing spectacle at the Massachusetts Museum of Contemporary Art."

Other highlights:

• "By opening this show without [Büchel's] assent, the museum has broken faith with the artist, the public and art itself."
• "Although museums still focus most of their energy on finished works ..., they now routinely function as patrons, using their budgets to help artists create works from scratch. ... [But] there are dangers, including the possibility that in controlling the purse strings, a museum starts thinking of itself as a co-author who knows what the artist wants better than he or she does."
• "Initially I felt some sympathy for Mass MoCA. ... But when the museum became set on opening the unfinished piece over Mr. Büchel’s objections, my sympathy evaporated. And when I visited Mass MoCA, my sentiments curdled."
• "[B]y opening this strange quasi display, MassMoCA does even more damage to itself and to its reputation as a steward of art and as a conduit between living artists and the public."
• "My first thought while walking among the tarps is that no one working at the museum had ever seen a finished Büchel, which would be pretty astonishing, especially since a very large Büchel installation was on view in London while things were unraveling in North Adams."
• "[T]he museum has removed the bar that was part of the Büchel piece to make way for 'Made at Mass MoCA,' a self-serving, slapped-together display of photographs of previous installations. ... Beyond that and up a flight of stairs, things get stranger still. ... On [one] wall newspaper articles and editorials about the controversy are pinned to the wall, although a scathing indictment of Mass MoCA by The Boston Globe’s art critic is absent. The museum deserves to be scathed."
• "In the end it doesn’t matter how many people toil on a work of art, or how much money is spent on it. The artist’s freedom includes the right to say, 'This is not a work of art unless I say so.'"

Do Tax Breaks for Charitable Donations Make Sense?

There's an interesting debate going on in the blogosphere sparked by this New York Times article by Stephanie Strom last week questioning whether allowing tax deductions for charitable giving is good policy. Lee Rosenbaum took issue with Strom, who responded in a comment to this Chronicle of Philanthropy post. Tyler Cowen, while conceding the system is "inegalitarian" in the sense that it "'impos[es]' the desires of the rich on social priorities and wealth redistribution," lists six reasons why he's still a fan, including:

• "The arts receive about five percent of U.S. charitable donations. I am more than willing to stomach this degree of anti-egalitarianism in the non-profit subsidy, and yes we do get more beauty for it. Furthermore the alternative of more direct government arts funding would not work out well in the relatively Puritan United States, even if you think it has worked well in Europe."
• "The general proliferation of non-profit institutions makes America a much more innovative and diverse place, intellectually and otherwise."
• "Relying so much on private philanthropy chips away at the dangerous attitude that there are clearly defined social priorities to which everyone must pay the same heed."

"Instead of flatly banning the export of antiquities, why not ban their sale but allow them to be rented?"

"Undercover Economist" Tim Harford discusses an interesting proposal for eliminating the black market in stolen antiquities.

Next Up on the Deaccession Docket

While the Fisk-O'Keeffe lawsuit has come to a close, another deaccessioning lawsuit continues apace: "A group of 11 people associated with Randolph College's Maier Museum of Art filed legal action in Lynchburg Circuit Court on Tuesday to prevent the sale or sharing of the museum's artwork." The motion to intervene was filed in response to the college's request last month for a declaration that it has the authority to sell or share ownership of works purchased with funds from a trust set up under a 1928 bequest (or, if it doesn't, that the terms of the trust be modified to give it the authority). Portfolio magazine's Callen Bair sums up their claims:

"They argue that [the donor] meant for the pieces bought with money from her trust to remain at Randolph in perpetuity; that the college is considering a sale of the art 'to try to correct its poor decision making and past financial mismanagement'; and that it can solve its financial problems by better handling its resources and pursuing other fundraising options."

More on the lawsuit from Lee Rosenbaum here. Time magazine's Richard Lacayo had some thoughts recently on the Maier situation generally.

The Other Barnes Lawsuit

Montgomery County has now filed its Orphans' Court petition to block the Barnes's move to Philadelphia. The Philadelphia Bulletin has the story. It sounds like a much narrower suit than the one filed by the Friends of the Barnes group a couple of weeks ago: "The county contends that while there may have been a legitimate worry about the collection's inability to afford to stay put, circumstances have changed for the better. Thus Barnes' wish, specified in an official trust, to leave the Barnes in its current location should be honored, the petition said. 'It is axiomatic that if conditions dictate diverting from the language of a trust or the intent of the grantor when financial circumstances will no longer allow the carrying out of a charitable trust, when circumstances again change in such manner to allow the grantor's intent to be carried out, the language of the trust should be followed and the trustee has the obligation to follow a course in accord with the grantor's wishes,' the county argued."

The Fisk Decision

I've now had a chance to read Chancellor Lyle's decision rejecting the proposed Fisk-O'Keeffe settlement, which in turn led the O'Keeffe Museum to drop its lawsuit (as well as to "a little joy in Fiskville"), clearing the way, or so the consensus goes, for the university to accept an 11th hour offer that had come in from Alice Walton's Crystal Bridges Museum. The court saw the matter as turning on a single question: was the proposed settlement "in the best interest of the people of the State of Tennessee?" And it thought the answer was "no," for the simple reason that there was a better offer on the table from Crystal Bridges. The court listed "several reasons" for this conclusion:

1. The "obvious reason" that Crystal Bridges "offers more money": "$30 million is four times the $7.5 million offered by the Museum. ... While $7.5 million might tide Fisk over, $30 million would put the University on much firmer financial footing." As I've mentioned before, the museum's offer -- because it would also have allowed the university to sell a valuable Marsden Hartley painting on the open market (albeit subject to certain restrictions that would have depressed its price at least to some extent) -- would probably have yielded the university somewhere closer to $25-$30 million. So then the question becomes would you rather sell half the entire collection for $30 million or, for (roughly) the same price, sell the two best works in the collection and retain 100% ownership of the other 99 (lesser) works (plus the right to exhibit the single best painting for four months out of every four years, or just over 8% of the time). I'm not sure how you would even go about answering that question.

2. The Crystal Bridges offer gives the people of Tennessee "more access to ... the important artwork Radiator Building." That's undeniably true, but it gives them less access to all the other works in the collection (other than the Hartley). Instead of having access to those works all the time, under the Crystal Bridges offer they would have access to them 50% of the time. Again: how do you weigh those alternatives against each other?

3. The third and final reason is, in Chancellor Lyle's words, "integrity. The law respects and honors the intent of donor's [sic] who give charitable gifts." By which I suppose she means that the people of the State of Tennessee have an independent interest in seeing people's donative intent respected, separate and apart from whether or not, from a purely consequentialist perspective, honoring that intent would benefit the people of the State (as, for example, if the intent was that the works never be sold, in any form). And here the court interpreted the donor's intent to be (a) that the collection be "preserved as a whole and remain intact"; (b) that it be "titled and known as the 'Alfred Stieglitz Collection'"; (c) that it "convey [Stieglitz's] unitized view of modern art"; and (d) that Radiator Building "is essential to and the heart of" the collection. On that interpretation of O'Keeffe's intent, it's hard to argue that the Crystal Bridges offer isn't superior to the proposed settlement.

As I mentioned above, the consensus seems to be that the door is now wide open for Crystal Bridges, though the chairman of the board of the O'Keeffe Museum said this week that "it’s by no means a done deal" and Attorney General Cooper "reiterated a point he made in a letter to Walton last week: 'I would still prefer to see a local proposal that allows the Collection to remain in Nashville on a full-time basis.'" Isn't it obviously in the best interests of the people of the State of Tennessee to open it up to other bids? Maybe another museum somewhere is willing to offer more than $30 million for a 50% interest.

But what if an institution (or even an individual) in Tennessee steps forward with an offer of less than $30 million but which satisfies Cooper's wish that the collection stays in Tennessee?

Then what?

Alice Walton, call your office! (UPDATED)

Whoa. Things just took a very interesting turn in the Fisk-O'Keeffe case. The AP is reporting that the O'Keeffe Museum has dropped its lawsuit: "The New Mexico museum moved to dismiss its lawsuit one day after a judge denied a settlement agreement that would have sent a prominent O'Keeffe painting to the museum for $7.5 million. ... The dismissal opens the door to a $30 million offer from the Crystal Bridges Museum in Bentonville, Ark., to share a 50 percent stake in the collection and to display it half the time."

UPDATE: Jonathan Marx has more in The Nashville Tennessean this morning. Fisk President Hazel O'Leary says "our law firm has been in touch with the Crystal Bridges Museum, and I would expect to hear from them formally in the next day or two." More here from The New York Times, where O'Leary says "we’re about to have a little joy in Fiskville tonight."

BREAKING: Fisk-O'Keeffe Settlement Rejected

Lee Rosenbaum breaks the news that the Chancery Court has rejected the proposed settlement between Fisk University and the Georgia O'Keeffe Museum. Lee says "even though she wasn't a party to these proceedings, this sure sounds like a judgment in favor of Alice Walton."

More later.

"There's no good reason for Ott to reconsider his decision. It's time to press on" (UPDATED 2X)

The Philadelphia Inquirer had an editorial on the Barnes on Friday. In today's paper, Inga Saffron reports on some on-pressing: Tod Williams and Billie Tsien have been chosen to design the new museum. Saffron likes the choice: Williams and Tsien are a "good fit for the Barnes, which is obliged by the courts to replicate its idiosyncratic 1920s galleries that now house the collection."

UPDATE: More from Robin Pogrebin in today's New York Times: "In 2004 a judge in Montgomery County, Pa., cleared the way for the move by ruling that it was the only way to save the cash-strapped Barnes from bankruptcy. (Three Philadelphia-area foundations have pledged to finance the relocation.) But even while allowing the foundation to violate the wishes of its founder, Albert C. Barnes — who mandated that no picture could ever be moved on the walls — the judge said that a transplanted Barnes should strive to be a re-creation of the original. ... Thus Ms. Tsien and Mr. Williams must work within those parameters even as they create something new ...."

UPDATE 2: Tyler Green is not impressed with the Inquirer's editorial. In particular, he takes issue with the board's assertion that "[Judge] Ott decided that businessman Albert C. Barnes' collection could be moved in order to expose it to a wider audience." I think Tyler's right that that was by no means the rationale for the decision, but, near the end of his opinion, Judge Ott did say the following: "By many interested observers, permitting the gallery to move to Philadelphia will be viewed as an outrageous violation of the donor's trust. However, some of the archival materials introduced at the hearings led us to think otherwise. Contained therein were signals that Dr. Barnes expected the collection to have much greater public exposure after his death."

The LA Times's Christopher Knight also thinks Judge Ott should reopen the proceedings. He cites to "two disquieting facts that emerged after his 2004 ruling" which "imply" that he was "duped." The two facts, which keep coming up in this conversation and so are worth looking at a little more closely, are:

1. In 2002, "the state appropriated $100 million for downtown construction. But that huge budget allocation was never publicly announced. It remained undisclosed for four years -- until long after the judge's ruling."

2. Also in 2002, the The Pew Charitable Trusts, one of the three charitable foundations leading the charge to move the Barnes to Philadelphia, filed an IRS application to change its status from a private foundation to a public charity. According to Knight: "Pew's application held out its management of Barnes fundraising as 'a prime example of the valuable role that [Pew] will play.' But that's not the story Pew Charitable Trusts President Rebecca W. Rimel later told Ott's court, according to the [Friends of the Barnes recent] petition. By the time she took the stand to testify in the Barnes hearing, the successful change in her foundation's status had been announced. Yet the change, she said, was 'not based on anything that may or may not happen with the Barnes. . . . It has no implications whatsoever.'"

I'm not sure I see why these are supposed to be grounds for reopening (let along reversing) the earlier decision, which expressly turned on the answers to three questions:

(1) Could the Barnes raise enough money through the sale of its non-gallery assets to keep the collection in Merion and achieve fiscal stability?

(2) Can the Philadelphia facility be constructed on the $100 million budget that was being proposed?

(3) Is the Foundation's so-called three-campus model -- the new Philadelphia museum, administrative offices in Merion, and a Chester County farmhouse operating as a "living museum" -- feasible?

Looking at those three questions, and turning back to Knight's first point -- the $100 million that had been allocated for downtown construction -- doesn't that actually help support the Judge's decision? If anything, it would have given him additional comfort on the second of the three questions (is this thing really going to get built in Philadelphia?), without, so far as I can see, affecting the answers to the other two questions in any way. Similarly, the second point Knight raises seems not to have anything at all to do with the three questions the Judge was considering. Sure, Rebecca Rimel may have been less than fully candid in answering that question (and I'm not sure I see even that: wasn't she just saying that the change in status was going forward no matter what happened with the Barnes, which for all we know was entirely true?) -- but, if so, what does that testimony have to do with whether enough money could be raised through the sale of non-gallery assets to keep the collection in Merion, or whether the Philadelphia facility could be constructed on the proposed budget, or whether the three-campus model worked?

I had reservations of my own about the decision, but these particular issues have never struck me as especially serious.

Latest on the Pollock-Matter Matter (UPDATED)

I've been meaning to update on the "Pollock Matters" show, which opened at Boston College's McMullen Museum of Art last weekend. The Boston Globe's Geoff Edgers was there:

"The Matter pictures were only a part of the exhibition, which features more than 170 works over two floors. 'Pollock Matters' explores the relationship between the two couples, Herbert Matter and his artist wife, Mercedes, and Pollock and abstract painter Lee Krasner. To that end, the galleries feature photographs and paintings by the Matters, Krasner's canvases, copies of journals, letters, and a handful of undisputed Pollocks, including the MFA's 'Number 10.' Downstairs, the Matter pictures were displayed in a separate room and not credited to a particular artist. The room was a prime destination."

Globe art critic Ken Johnson reviews the show here: "If the two dozen small paintings discovered by Alex Matter five years ago in his deceased parents' storage locker are not by Jackson Pollock, then I'd like to congratulate whoever did make them. Now on view for the first time in a fascinating, much anticipated exhibition called 'Pollock Matters' at Boston College's McMullen Museum of Art, they are beautiful little pictures."

Then, on Tuesday, as if there wasn't enough controversy surrounding the exhibition, Edgers reported at his blog that, having been denied permission to reproduce any real Pollocks in the show's catalog, the museum went ahead and included certain images anyway, on fair use grounds. The school issued the following statement:

"Following the Pollock Krasner Foundation's decision to withhold permission to reproduce works of Lee Krasner and Jackson Pollock in the PollockMatters catalogue, Boston College worked closely with copyright counsel to produce a catalogue incorporating those images needed to publish our contributors' scholarship in conformity with fair use principles."

More here on this "latest wrinkle" from Cleveland Plain Dealer art critic Steven Litt.

"Fair use" cases are notoriously difficult to call, and I haven't seen exactly how the images are used in the catalog, but as a general matter this kind of scholarship/research use should at least have a fighting chance. The fact that the museum first asked for permission should not be dispositive either: recall the recent Grateful Dead decision, finding fair use in a case where the publisher's request for a license had previously been rejected.

UPDATE: Sergio Muñoz-Sarmiento thinks "Boston College seems to have a valid and solid reason for dismissing the Pollock Estate’s denial."

In the Governator's Hands Now

California's Marilyn Monroe bill has moved one step closer to becoming law:

"Distant heirs of celebrities who died before 1985 could control their publicity rights under a bill the Senate sent to celebrity Gov. Arnold Schwarzenegger Friday. The bill by Sen. Sheila Kuehl, D-Santa Monica, was in response to recent court rulings that said California's celebrity rights law doesn't apply to those who died before the law was adopted. ... The Senate agreed to Assembly amendments on a 32-0 vote."

The Fisk Hearing

Jonathan Marx reports in The Nashville Tennessean that "Davidson County Chancellor Ellen Hobbs Lyle is expected to rule in the next few days whether to approve a settlement between Fisk University and the Georgia O’Keeffe Museum." There was a hearing on the settlement today. Reports Marx:

"Speaking from the bench, Lyle noted that in a case regarding a disagreement over a charitable gift, the law doesn’t require a perfect solution, but rather a solution that comes as close as possible to honoring the wishes of the donor. ... If Lyle chooses not to approve the settlement, all parties will proceed to a Sept. 18 trial date, at which the museum will argue that it should get the entire Stieglitz Collection because Fisk has breached the conditions of O’Keeffe’s donation."

One Step Closer

From the Associated Press:

"Mayor John F. Street signed legislation that authorizes the city to enter into a long-term lease with the Barnes for a site occupied by a juvenile detention facility. That building will be torn down to make way for the Barnes' new home as soon as its population can be relocated, officials said."

Philadelphia Inquirer architecture critic Inga Saffron says this is "just the first of the Barnes' headline grabbing efforts":

"The museum, which announced a short-list of six architects this spring, and seems undeterred by the latest lawsuits aimed at stopping the move, is expected to name a designer for the project by next week. One unofficial, but informed, source predicts there is a good chance it's either going to be Rafael Moneo, author of Los Angeles' Catholic Cathedral, or Tod Williams and Billie Tsien, creators of Philadelphia's best recent building, Skirkanich Hall. The Barnes is probably the most important architectural commission of the decade, so whoever wins should be one happy designer."

Can museums compete?

Lee Rosenbaum had an op-ed in yesterday's Los Angeles Times arguing that "driven by the scarcity of great old works and an expanding class of wealthy buyers, the recent stratospheric rise of art prices has utterly outstripped most [museum] acquisitions budgets." Greg Allen and Tyler Green (1 and 2) take issue with her thesis. Lee responds here.

I'll stay out of the underlying debate, but I did want to mention two things that caught my eye in the back-and-forth. First, Lee's piece mentions the changes in the law governing fractional gifts to museums, a subject covered extensively here a year ago:

"Last year, tax deductions for 'fractional' donations were sharply restricted. Collectors used to be able to promise a work to a museum and take the tax benefit over time, sometimes over decades. Museums displayed the works occasionally, donors had them the rest of the time and the deductions appreciated as the work appreciated. The new restrictions 'effectively ended donations of fractional gifts to museums,' wrote Gail Andrews, president of the Assn. of Art Museum Directors, in a recent letter to Rep. John Lewis (D-Ga.), chairman of the House Ways and Means Oversight Subcommittee. Andrews, director of the Birmingham Museum of Art, urgently requested changes in the law and described the plight of five unidentified institutions across the country that had lost donations. Jeremy Strick, director of Los Angeles' Museum of Contemporary Art, acknowledged that MOCA was one of those institutions, and that a donor had withdrawn 40 promised works. Strick told me that about 30% of art donated to his museum had previously come as fractional gifts. The tax-law changes, he said, derailed negotiations with 'five to 10' potential donors."

Second, Greg makes an interesting point against the radical anti-deaccessionists (like Lee). Speaking of MoMA's acquisition of Pollock's iconic One: Number 31, 1950, he says:

"Ironically, even at that point, Rubin had to raise the money to buy One ... by selling two paintings by Mondrian .... I say ironic because the other of Rosenbaum's laments is that museums are 'selling to buy,' deaccessioning works in order to buy other works. Or to put it another way, had the Modern followed Rosenbaum's ideal policy in 1967, it wouldn't have made its landmark purchase of "One: Number 31, 1950" (1950) by Jackson Pollock. But hey, at least it'd have 45 Mondrians instead of the measly 43 it has now."

The Joe Thompson Rules

Sergio Muñoz-Sarmiento has some thoughts on the summary judgment briefs we filed at the end of last week in the lawsuit MASS MoCA brought against Christoph Büchel. He says "this type of gross deviance from an artist’s instructions or wishes should shock the conscience of any contemporary artist."

I’ll have more to say about the filings over the next few days, but one thing I want to call attention to at the outset. MASS MoCA’s brief includes the following section headings, among others:

• "VARA Does Not Bar Display of Unfinished Work"
• "Work by MASS MoCA Personnel to Carry Out Büchel's Plans ... Does Not Constitute 'Distortion, Mutilation, or Modification' Under VARA"

They also continue to push the completely offensive argument that the logistical support they provided somehow made them Büchel’s "co-author" on the project (see pp. 5-6 of the museum’s brief).

The point I want to emphasize for now is that, if the museum succeeds in its lawsuit, the loser will not be Christoph Büchel but all artists.

If they win the case, it will not be because of something specific to the relationship between this artist and this museum. It will be because they have convinced the Court that "VARA does not bar the display of unfinished work." Not Christoph Büchel’s unfinished work, but every artist’s unfinished work. It will be because they have established that, as long as you can claim you were "carrying out the artist’s plans" (even if, as a matter of objective fact, you carried them out incorrectly), you are immunized from VARA liability.

If MASS MOCA wins its lawsuit, artists in this country will wake up the next morning with far fewer rights than they had the day before.

I’m not sure if people appreciate that the legal case does not turn on who was at fault as between Büchel and the museum. Instead, it turns on how VARA is properly interpreted. So that it can win its case – so that it can win the right to show what it insists on calling mere "materials"–MASS MoCA is pushing for an extremely narrow reading of the statute (it doesn’t prevent the display of unfinished work, etc.). If the museum does get the right to show those mere "materials," then, it will have done so at great cost to artists’ rights generally.

So what Joe Thompson did on his summer vacation – in addition to being "sad, dumb, and shameful," in addition to wasting his premier gallery space during the museum’s peak visiting season – was to work towards a general narrowing of artists’ rights in this country.

If he succeeds, we can call the new legal principles that result "The Joe Thompson Rules."

"Unfortunately, he didn’t just keep quiet"

The chairman of the board of the O'Keeffe Museum reacts to the Tennessee Attorney General's filing in opposition to the museum's proposed settlement with Fisk University: "Normally, when two parties are in litigation and they agree to settle, that’s the end of it." More here from the Santa Fe New Mexican.

Against It

Tennessee Attorney General Robert Cooper Jr. answers Lee Rosenbaum's prayers and files a brief expressing opposition to the proposed settlement between Fisk University and the Georgia O'Keeffe Museum. It isn't clear to me whether Cooper has the power to stop the deal or not (if he does, one wonders why he would bother expressing opposition to it to the court, rather than just going ahead and stopping it on his own). The court will take up the proposal at a hearing this Thursday.