Maybe we should try sanctioning somebody

I mentioned a couple weeks ago that the Hall Monitors didn't know how to feel about the Corcoran matter. Now, along comes Lee Rosenbaum in the WSJ to argue that the Judge should reject the Corcoran's proposal ... but at the same time she doesn't seem too impressed with the alternate plan suggested by those opposing the petition.  Or, as Hall of Famer Kriston Capps put it on Twitter: "[Rosenbaum's] Corcoran takeway:  Don't go with the NGA-GWU plan, but also don't go with the alternative?  So ... what?"

A Decision in the Rauschenberg Foundation Fee Dispute

$24.6 million to the three trustees.  Story here.  Background here.

"If the Corcoran’s preference for GWU and the NGA is door No. 1, and Maryland is door No. 3, the bold offer of help from philanthropist Wayne Reynolds — who says he already has 23 'alternative trustees' lined up — is door No. 2." (UPDATED)

Week one of the Corcoran cy pres hearing is over.

UPDATE:  Good summary of the week's proceedings from Nicholas O'Donnell.

"Two widely divergent views of the financial troubles of the Corcoran Gallery of Art ... emerged in sometimes contentious testimony in the District of Columbia Superior Court on Wednesday."

The latest, from Theodore Schleifer and Randy Kennedy in the Times.

"Anyone who thought that the Corcoran’s dissolution was a foregone conclusion would think again after yesterday’s court proceedings."

A report on day one of the Corcoran cy pres hearing.

I guess it wasn't grand enough

An interesting scoop from Nathan Bomey and Mark Stryker in the Detroit Free Press this morning:  "[C]ity officials quietly formulated a proposal in late 2011 to sell the city-owned Detroit Institute of Arts to nonprofit foundations for $550 million to create cash flow for the city, fund museum operations and transfer ownership so the art could never be sold to pay city debt.  The plan — according to records obtained by the Free Press and never publicly revealed — bears a striking resemblance to this year’s grand bargain designed to protect the DI."

Here's my question.  The collection is worth somewhere between $2.7 and $8.5 billion.  What makes $816 million the "right" number rather than $550 million?  Why not $943 million?  Or $286 million?  Or $1.35 billion (half the low end estimate)?  Where did the "grand bargain" number (816) come from?

The problem with the public trust ...

... is the public.  Why do they have to be so damn interested in seeing the works?

Michael Rushton tweets:  "If only there existed some sort of mechanism for allocating scarce goods with excess demand."

$8.5 billion (UPDATED)

That's the value of the Detroit Institute's collection according to an appraisal commissioned by one of the City's largest creditors.

UPDATE:   More from Randy Kennedy in the NYT.   Look, at this point the work could be worth $85 billion and it wouldn't make a difference to those opposed to any sale.

Interesting Sales Tax Decision (UPDATED)

(How often do you get to say that?)  It involves the dealer Richard Feigen.  He sold a painting in 2004 for $2.5 million and paid sales taxes of $215,000 to the NY authorities in 2005.  In 2011, it emerged that the painting was one of the Beltracchi forgeries.  Feigen refunded the purchase price to the buyer and applied for a refund of the sales tax.  The ruling of the New York Division of Tax Appeals:  too late.  The statute of limitations for sales tax refunds is three years from filing or two years from payment, and in either case it had long expired.  The decision is here.  The NYLJ has a story here.  Feigen vows to appeal.

UPDATE:  The NYT's Patricia Cohen tweets:  "These sorts of shortsighted rulings are unfair on their face and discourage dealers and sellers from doing the right thing."

Fair Use Update: It's still a mess

Sergio Muñoz Sarmiento flags a good student note in the Harvard Law Review on the Prince-Cariou decision. The bottom line:  "Because outcomes based on value judgments are difficult to predict, artists will struggle to conform their actions to the law ex ante, and the ultimate outcome may be a chilling effect on the creation of cultural products."  I agree.

Corcoran Update: Nine members of Save the Corcoran get standing (UPDATED 2X)

The Washington Post confirms.  The amusing thing about this one is that the Hall Monitors don't know how to feel about it.  On the one hand, they're against the proposed plan because they're against everything they care deeply about the principle of donor intent.  On the other hand, Save the Corcoran's plan to save the Corcoran involves selling a bunch of art to keep it afloat, which is the most appalling, repulsive, horrible thing anyone has ever suggested.  So they're in a quandary.

UPDATE:  A thorough analysis of what comes next from Kriston Capps.

UPDATE 2:  Capps is gunning to become the first journalist to join my Deaccessioning Hall of Fame.  (Peter Schjeldahl almost made it, but recanted his heresy before we could get the acceptance papers out to him.)  In a Twitter exchange with Christopher Knight, Capps says "There is good reason for Corcoran students to fear being absorbed by GW. Why not balance their future with non-essential works?" and then adds "Plainly, tactical [deaccessioning] can work fine."

Detroit Update: Pensioners vote in favor of Grand Bargain

Detroit Free Press story here.  This was as expected.  The real question is whether Judge Rhodes will force the other creditors to accept the deal:  "Unless the city reaches a settlement with the financial creditors — which would currently get anywhere from 0 to 10 cents on the dollar for their debt — Rhodes will have to decide whether to force them to accept cuts. The financial creditors argue that the grand bargain is illegally constructed to benefit pensioners and diminish the value of the DIA art. They want the city to consider a sale of the city-owned DIA or some of its artwork."

Who's left standing?

There appears to be some uncertainty about the results of today's hearing in the Corcoran matter.  Lee Rosenbaum reports that the AG told her standing was denied to "Save the Corcoran as an organization."  But Save the Corcoran as an organization tweets excitedly:  "Ladies & Gentlemen: We have standing. 9 of our plaintiffs were granted standing today. Trial starts Monday."

"What makes a real Matisse better than a fake? What makes any original work or art more valuable and special than a copy?"

The Guardian's Jonathan Jones:  "maybe we are at last about to enter the revolutionary age Benjamin predicted, when reproductions become so good that originals no longer have any value."

Resale Royalty Update (UPDATED)

There was a flurry of coverage of the proposed resale royalty bill this week, centered around a hearing of the House IP Subcommittee on Tuesday.  The Art Newspaper's Julia Halperin says the bill is "gaining momentum in Congress."  More here from Artnet's Eileen Kinsella and here from AFC's Henry Kaye.  Nicholas O'Donnell has his usual helpful commentary here.  Despite all the noise, however, GovTrack still gives the bill just a 3% chance of being enacted.

I've been intending to write something more substantial about this issue (maybe if the chances of enactment rise to 5%, I will), but for now there's one point I'd like to make about the current version of the bill.  Though the "smart view" of the issue is that resale royalties are a terrible idea (for roughly the reasons expressed here), I think there are strong fairness-related reasons in support of the idea.  Christopher Rauschenberg had a Huffington Post piece this week where he talked about a work his father had sold to a collector for $900 which the collector later sold for $85,000.  Now imagine a similar example where the later sale was for $8 million.  That's the art world we find ourselves in today.  I think, in a case like that, most of us would have an intuition that that is deeply unfair to the artist and, all else being equal, if there were some way for her to share in that increase in value, that would be a good and just thing.  Now, that's not the end of the analysis -- all else might not be equal and there might be disadvantages to a resale royalty scheme that outweigh those fairness considerations, but I think it's at least worth acknowledging they exist.

But here's the problem with the current bill:  it caps the royalty at $35,000.  So in our example, where the collector sells the $900 work for $8 million or $18 million or God knows what, the artist gets ... $35,000.  I suppose you could say that's better than nothing, but I'm not sure it does very much to diminish the sense of deep unfairness that attaches to the transaction.  And, without that, the bill becomes a lot harder to defend against its critics.

UPDATE:  Sergio agrees:  "If the issue is 'fairness' and just desserts, then why set a ceiling?"

"Japanese Artist Megumi Igarashi Arrested Over Vagina Kayak"

"A Japanese artist who made a kayak modeled on her vagina said ... she was 'outraged' by her arrest and vowed a court fight against obscenity charges.  Megumi Igarashi, 42, says she was challenging a culture of 'discrimination' against discussion of the vagina in Japanese society."

"The current value of the trust’s art collection, Shniberg says, is around $125 million."

Bloomberg's James Tarmy has a lengthy, interesting piece on the Artist Pension Trust, which is getting ready to start selling some work.  I guess the proof will be in the pudding, but I've long been a little skeptical for the reasons Tyler Cowen articulated here.  Cowen's bottom line:

" ... decompose the transaction.  Half of your income stream remains tied up in your own art and thus risky, minus the [28%] of course.  With the other half of your pension you decide to invest in not-yet-totally-famous artists.  Would anyone recommend such purchases on their own merits?  Is that your idea of insurance?"

"Psihoyos's arguments are entirely without merit."

Interesting copyright decision from Judge Kaplan in the Southern District regarding rights in photographs of sculpture.  Let's just say he was not amused by the photographer's arguments.

Ain't it Grand!

The WSJ:  Detroit's Water Cutoffs Spark Protests.

Wring Wring

Had a chance to read the D.C. Attorney General's brief in support of the Corcoran's cy pres request.  You can read it here.  I'll be very surprised if the relief isn't granted, but two things in particular jumped out at me as interesting.

The first is how heavily the AG leans on the deaccessioning taboo to support his position.  One of the arguments the Save the Corcoran folks make is that the museum doesn't have to close, it can sell some art to raise the money it needs to stay alive.  Oh, says the AG, if only that were possible:  unfortunately, doing so "would likely result in a loss of accreditation, and would dramatically undermine the Corcoran's reputation within the museum field."  We saw the same thing with the Barnes Foundation; they could have sold a very small number of works and raised the cash they needed to stay put.  But the big bad Deaccession Police, with their non-nuanced black and white view of deaccessioning, and their sanctions, always with their sanctions, made that impossible.

The other thing worth mentioning again -- and this is another point of similarity with the Barnes, where the entire collection remains intact and hung exactly as it was in the original location, only in a spiffy new building five miles away that's more accessible to a greater number of people -- is that you have to work pretty hard to find something seriously objectionable about the ultimate outcome here.  What will happen if we don't "save the Corcoran"?  According to the AG, the following:

"Although the proposed transactions will disburse the Corcoran's art collection to multiple museums and institutions in D.C., ... the art will remain in D.C. and accessible to the public.  Moreover, public access to Corcoran artworks should actually increase under the proposed transactions.  The art will  now be exhibited at the National Gallery, at [the Corcoran's] 17th Street building under the 'Corcoran Contemporary' name, and at other museums and institutions in D.C., which should increase the amount of Corcoran art being exhibited at any given time.  Moreover, the public will have free access to the Corcoran's art at the National Gallery and other museums and institutions ...."

In addition, the 17th Street building will continue always to exhibit work.  "This term was a necessary condition of the District's support of the Corcoran's proposed transactions, as it ensures that the 17th Street building will continue to be a 'Public Gallery and Museum' in D.C."  The building will also continue to house the Corcoran School, which will now become part of George Washington University and be known as the "GW Corcoran School."

The hand wringers will wring, because that's what they do.  But no one should really be losing any sleep over this.

Grander and Grander

The Detroit Institute announced yesterday that it has raised another $27 million towards the $100 million it pledged to contribute to the so-called Grand Bargain solution to the city's bankruptcy.  (They keep rolling it out drip by drip and I have to say the suspense is killing me.  I wonder if they're going to make it to one hundred.  It's a real nail-biter.)

Meanwhile, while I was away last week a new appraisal of the museum's collection showed it could be worth as much as $4.6 billion.  This was mostly pooh-poohed by the anti-sale side, and one method of pooh-poohing is seen in this piece by Kriston Capps.  "Ultimately," he says, "selling Detroit's art will do more for deficit reduction than for alleviating suffering."  The idea is that the money from any sale will only go to line the creditors' pockets, rather than to suffering Detroiters, and since there is an easier way to get rid of the creditors (Judge Rhodes can just stick it to them), why touch the art?

That may be so, but the more interesting question, I think, is:  what if it could?  What if it could alleviate suffering?  That's the question economist Scott Sumner addresses in this post.  He points out that "5% of $3.7 billion is $185 million a year, the annual income that ... could be generated by the midpoint of the Detroit art wealth estimate. What else could be done in Detroit for $185 million/year, forever?"  (Or, as Michael Rushton puts it, "in thinking about the ownership of a significant collection of art by Detroit (or any city), the opportunity cost of the capital should be taken into account, along with all the other costs and benefits of preserving the collection in that place.")

So yes, in this particular case, a sale of art may not do anything to alleviate suffering (other than perhaps the suffering of the creditors!), but what about cases where it could?  What about the university or museum that could be saved from closure through a sale?  Or, sticking with Detroit, Sumner also points out that they "could sell a handful of the most valuable paintings for $1 billion and keep the museum mostly intact." (I made a similar point here.)  What then?

Or does a billion dollars not do much to alleviate suffering these days?

Tweet of the Day

Actually it's from yesterday, but I'm still catching up after a week away.  From philosopher Nigel Warburton:  "Users of slippery slope arguments should take skiing lessons - you really can choose to stop."

Someone tell the Deaccession Police.  Having given up on the public trust argument, this is all they've got left.

Whatever it is, they're against it

I haven't been following the Corcoran "cy pres" story very closely, and have one foot out the door to a week's vacation, but I have noticed that the usual hall monitors are Very Upset.  And what is it they're wringing their hands about this time?  Here's Randy Kennedy's summary of the current plan:

"Under the deal announced in May, ... the defunct Corcoran would cede its collection of more than 17,000 pieces ... to the National Gallery, its much larger neighbor. The National Gallery would preserve a 'Legacy Gallery' within the Corcoran’s building on 17th Street, a block from the White House, and organize its own exhibitions of modern and contemporary art there. The much-admired building would become the property of George Washington University, which would use it for classes for students of the Corcoran College of Art + Design."

Oh, the horror.

In re Re

"An East Hampton man stands accused this week of selling over 60 forged paintings, which he claimed to be by Jackson Pollock, to private collectors and on eBay, netting him nearly $1.9 million."

Held in the public thirst

Slate.com:  Detroit Resumes Cutting Off Water to 150,000 Residents, Prompting Appeal to United Nations for Help.

I don't believe that's dealt with in the Grand Bargain, but maybe it's in the fine print.

"Both sides have now delivered their arguments and await the decision of Judge Jay Rosman of Lee County Circuit Court."

The Art Newspaper's Charlotte Burns has the latest on the Rauschenberg Foundation fee dispute.

More Sanctionier

Carolina Miranda joins Lee Rosenbaum in calling for even tougher sanctions for museums that "pawn off works held in a public trust."

Guys, I think I have the solution to this problem.  Two words:  Capital.  Punishment.  If a museum board votes to pawn off works ... off with their heads!

Are you with me?  Or are you ready to concede that I care more about art than you do?

(Keep in mind, though, that it's perfectly fine to pawn off works held in a public trust ... as long as the proceeds are used to buy art.  That kind of pawning off is fine.  No sanctions necessary.)

Big Bucks

Georgina Adam has a new book out.  The subtitle is "The Explosion of the Art Market in the 21st Century."

"Why commission original public art when you can steal an artist’s idea and outsource the work to China?"

Ben Davis on a $450,000 jury verdict against California real estate tycoon Igor Olenicoff.  (Davis says it's for "trademark infringement," but the underlying report to which he links says it was copyright infringement, which makes more sense.)  More from the Daily Beast's Justin Jones here.  Tom Flynn has been all over this story from the get go.  He says "[t]hankfully there are still a few lawyers willing to fight the oligarchs and the billionaires who would otherwise ride roughshod over artists' moral rights."

"Some say that the government’s ignorance is to blame for the recent failures in upholding the scheme."

Rachel Corbett in The Art Newspaper:  Percent for Art schemes fail to deliver.

Though the choice to sell was a difficult -- indeed agonizing -- decision, and a problem that does not admit of easy solutions ...

. . . the AAMD has, with regret, gone ahead and sanctioned the hell out of the Delaware Art Museum.  (Though when you read their statement, the regret part doesn't really come through so much.)

Lee Rosenbaum mocks their pathetic "whining" and calls for even tougher sanctions ("AAMD should try to convince major foundation and government funders that museums violating professional standards are unworthy of their support").  Because, after all, an important principle is at stake.

What is that principle again?  Oh yeah, the public trust -- I mean, "common sense."  (Or is it the sanctity of the coin of the realm?)

Speaking of the public trust, I got a chuckle out of the AAMD's latest statement, which includes the following line:  "With this sale, the museum is treating works from its collection as disposable assets, rather than irreplaceable cultural heritage that it holds in trust for people now and in the future."

But am I dreaming or were we not told a week ago that this is "not a matter, as is often claimed, of protecting the public trust"?

Well, what difference does it make, really, what it's a matter of?  Public trust, common sense, coin of the realm.  Whatevs.  The important thing is someone needs to be sanctioned and sanctioned hard ... even if we're not quite sure why.

"Note to Forgers: Don’t Forget the Spell Check"

"Newly released documents in a continuing civil case show that at least one of the works bought in 2000 by Ms. Freedman herself contained a prominent clue that something was awry. The artist’s signature was spelled incorrectly: Pollok instead of Pollock."

"After Much Debate, Picasso Curtain Will Be Moved From the Four Seasons"

New York Times story is here.  Background here.  I didn't follow all the ins and outs of this one, but it seems like a win for Aby Rosen:  he wanted to move it, and it's moving.  Or, as Paul Goldberger tweeted, "I thought it was too fragile to move?"

There's The Rub

Former AAMD president Timothy Rub has a piece in the Wall Street Journal today on the Delaware Art Museum deaccessioning.

This follows a piece he had a couple of months ago in the Delaware News Journal.  Back then, it was a "difficult -- indeed, agonizing -- decision."  Now things seems to have gotten less difficult and agonizing:  the new piece is headlined "A Dereliction of Duty" and expresses no doubt that the "decision was ill considered."

But the big news is that it's "not a matter, as is often claimed, of protecting the public trust."  That's good to know; I will keep that in mind for the future.  But before we move on, let me just ask:  who often claimed it was a matter of protecting the public trust?  Search this blog and you will find dozens of instances of the AAMD and other members of the deaccession police often claiming that it's a matter of protecting the public trust.  (A few are collected here.)  I'll be thrilled for them to drop this talking point, but let's at least be honest about the history.  We've always been at war with Eastasia.

So if it's not a matter of protecting the public trust, what is it a matter of?

The answer is ... common sense.  It's a matter of common sense.  Obviously it's okay for museums to sell work and use the proceeds to buy art but not okay to sell the same work and use the proceeds for any other purpose.  That's just simple common sense.

Actually, here's the whole answer:  "it's about common sense.  You don't cut out the heart to cure the patient; and yet this was the remedy chosen by Delaware's trustees to restore their institution to good health."  They "seem not to have understood their broader responsibility to care for all of the museum's assets -- most significantly, its collection."

Wow.  Where to begin with this?

First of all, the heart/patient analogy doesn't work at all.  Here's the thing about cutting out a patient's heart: if you do so, he will die.  The Delaware Art Museum is not going to die because it has 12,498 works in its collection instead of 12,500. The Detroit Institute would not die if it had 5% fewer works than it now has.  It may not be the same, it may even be significantly diminished, but one thing it will not be is a patient with his heart cut out.

In fact, doesn't it make more sense to see the trustees as having precisely understood their broader responsibility to care for the museum's assets?  Isn't that exactly what they take themselves to be doing with this sale? Here's what the museum's CEO had to say when the decision was announced:

"After detailed analysis, heavy scrutiny and the exhaustion of every reasonable alternative to relieve our bond debt, the Trustees had two agonizing choices in front of them -- to either sell works of art, or to close our doors."

Now, you may disagree with the choice they made, but does that sound to you like a board that has not understood its broader responsibility to care for the totality of the museum's assets?

There's more to discuss in the piece, but this post has gone on long enough already, so I'll stop here for now. I'm just amazed that these are the best arguments they can muster for a piece like this.  He should have at least mentioned the coin of the realm.  That's just simple common sense.

Crafty

More contributions flowing in to the grand bargain today.  And with them, a possible answer, from Mark Stryker of the Detroit Free Press, to my question yesterday -- why bother with the grand bargain at all?  Why not just tell the creditors to pound sand?

"[T]he rush of corporate and foundation gifts this week reinforces the clever structure and broad appeal of the grand bargain .... By linking support for the DIA to concern for pensioners, the deal makes it possible for a diverse set of third parties to contribute to the city’s recovery in ways that are palatable. Foundations whose missions typically preclude bailing out municipal debt can justify supporting the DIA. Meanwhile, politicians in Lansing who might be squeamish about supporting the arts know that all of the money contributed to the grand bargain will go to pensioners" (my emphasis).

It is very clever, though, as I pointed out yesterday, there is a potential downside.

We’ve already established that. Now we’re just haggling over the price.

The big news out of Detroit yesterday was the announcement that the Big Three automakers have pledged $26 million towards the "grand bargain" to save the DIA's collection.  I may not have been that impressed with their legal papers, but the museum's PR game is beyond reproach.  As Matt Helms and Mark Stryker point out, the grand bargain didn't grow at all with this announcement; instead, this represents part of the $100 million the DIA had already committed to raise towards the deal.  But it's very shrewd of them to trumpet this as a great success, and to create a sense of inevitability about the whole thing.  Well played.

It's always struck me, though, that there is an inherent tension in the whole idea of the "grand bargain."

On the one hand, we keep hearing that the collection is off limits to creditors.  As the attorney general has told us, and the museum has told Judge Rhodes, the works are held in trust.  They cannot be reached by the creditors.

But if that were really true, there wouldn't need to be a grand bargain.  The grand bargain, you'll recall, "brings together the equivalent of $816 million from national and local foundations, the DIA and the state of Michigan to spare the museum’s collection from a possible sale."  In essence, it's a sale of the museum's collection to a new, independent nonprofit for $816 million.  But what makes that the right number?  We know that the collection is actually worth a great deal more than that.  Doesn't the existence of the grand bargain make it easier for the creditors to come in and say, "Look, everyone -- even the museum itself -- acknowledges that the art isn't really held in any sort of legally cognizable trust, it cannot simply be removed from the bankruptcy process, there has to be a price to the removal ... and this price is too low.  There are people out there who will pay twice that amount and the bankruptcy trustees have an obligation to explore those higher offers."

Now, it may be that Kristi Culpepper is right that there is no way Judge Rhodes is ever going to rule that the art must be sold to the highest bidder.  But in that case, why bother with the grand bargain at all?  Then you're paying $800 million for an asset that's already yours.

"[A] potentially far-reaching decision ... that allows the victims of Nazi-related looting and their heirs to press ahead with legal efforts to reclaim stolen artwork."

I don't usually cover Holocaust restitution cases here at the blog, but I did write about the Norton Simon Museum lawsuit for the Journal of Art Crime a couple years ago so thought I'd mention the latest development in the case.  The NYT's Patricia Cohen has a report here.  The LA Times is here.  Nicholas O'Donnell comments here.

"Authoritative authentication is essential to a well-functioning art market, the bill's sponsors maintain."

Tracy Zwick has a good piece in Art in America on the proposed authentication legislation in New York.  I'm quoted as saying I don't think the legislation would be a game-changer, and here's why.  Suppose you're an authenticator thinking of speaking up in some future Knoedler-type situation.  You know that, if you do so, you may end up getting sued.  Under this proposed legislation, you might be a little more willing to do so, because you can recover your legal fees if you successfully defend the lawsuit ... but what if you can't?  What if the person who sues you doesn't have the million dollars (or more) you had to lay out to defend the suit (not to mention all the time and stress and aggravation that being in a lawsuit inevitably entails)?  And what if, heaven forbid, you lose the lawsuit?  It can happen you know; there are no guarantees when it comes to litigation.  Now you're looking at the possibility of a multi-million dollar verdict for disparaging that Pollock or Warhol or Basquiat.  When you add it all up, aren't you (probably) still going to keep quiet?

Trust Me

With Detroit's "grand bargain" sweeping ahead, and the art seemingly safe, I finally got around to reading the DIA's motion papers arguing against any sale.  I wasn't as impressed with them as Nicholas O'Donnell was (though I thank him for the kind words about me).  It struck me as the kind of brief where a lot of dust is kicked up in the air, but when you try to grasp onto an actual argument, it isn't quite there.  In general, I find the whole notion of works being "held in trust" to be unhelpful to the debate.  You think it's a bad idea to sell the work, that the harmful consequences of doing so would outweigh the good -- then say so, make your case.  Introducing some imagined or implied "trust" feels to me like stealing a base, a way to cut off debate.  But that's a longer argument for another day.  For now, I just want to mention a couple of things from the museum's brief.

First, it argues that "it would be dishonest, immoral, and indecent for the City to attempt to claim the right to sell any property for its own benefit that the City represented the Museum would hold for the Public benefit."  But a couple pages later, they acknowledge that the "City retains legal title" to the work.  So who is this "Public" (with a capital P for some reason) for whose benefit the City is holding the work?  In this case (where the City owns the work), wouldn't it make more sense to say "the City holds the work in trust for the benefit of ... the City"?

Or is it always some other, imaginary capital P public that the work is being held for?

Second, if the works are truly held in trust -- not in a vague, poetic AAMD way, but in an actual legal trust that you are telling a federal bankruptcy judge prevents their sale -- then who gave the museum the right to sell works Whenever It Goddamn Feels Like It so long as the proceeds are used to buy more work?  So not only do they invent an imaginary trust, they then invent imaginary terms for the imaginary trust.  Of course one of the imaginary terms of the imaginary trust is that the imaginary trustees are empowered to sell off assets of the trust any time they want as long as they happen to follow the "ethical" guidelines of the major museum associations.

Imagine that.  What a lucky coincidence.

"It makes pensioners as whole as possible and protects the Detroit Institute of Arts from having its artwork seized and sold off."

Detroit News:  Detroit's 'grand bargain' sweeps ahead.

Grubby Reality

I missed this before the weekend, but apparently a more "comprehensive" appraisal of the Detroit Institute's collection is underway as part of the bankruptcy proceedings.  Randy Kennedy has the story here.  (On the previous, less comprehensive appraisal, see here.)   In a series of tweets (which I'll string together here), Kristi Culpepper says:

"Everyone's getting worked up about [Judge] Rhodes asking for arguments about whether court can force city to sell non-core assets. It's a formality. Rhodes will rule that this is not the case for two reasons: (1) He tends to go against capital markets creditors no matter what. (2) The 10th Amendment of the US Constitution limits the court's power over the municipality in obvious ways. Namely, court is not permitted to interfere with the property or revenue of the municipality (i.e., force sale without govt's consent). The court cannot force the sale of the art or other 'non-core' assets anymore than it can force the city to raise taxes."

Can you copyright nothing?

Brian Boucher on a performance art "spat."

"The creditors never had any rights to the Museum Art Collection or any expectation that such charitable property would be available to satisfy their debts."

"This is the ‘grubby’ reality to which the Financial Creditors must yield."

The Detroit bankruptcy proceeding marches on.  I've always felt the "no reliance" argument has been the strongest one in favor of keeping the art off limits to creditors.

Has there been a Gardner theft sighting?

The headlines today make it seem so.  But Nicholas O'Donnell says "read carefully, ... the story is nothing new at all, just a retelling of last year's 'news' released around the anniversary of the theft and a raft of conjecture."

The DIA dispute is back in court today (UPDATED)

As usual, Mark Stryker is all over it.

UPDATE:  Stryker tweets, from inside the courtroom:  "Breaking: Judge Rhodes denies creditors' motion to get DIA documents and remove art from walls at DIA."

Is Detroit's art-for-pensions deal illegal? (UPDATED)

UPenn bankruptcy professor David Skeel says the answer is yes.

Meanwhile, one observer says "the city will probably end up back in Chapter 9 because they aren't fixing anything."

UPDATE:  Mark Stryker wrote about this in the Detroit Free Press last month.  Bottom line, as he put it on Twitter this morning, is that "other bankruptcy experts disagree w/ Skeel" (though he added:  "That said, Skeel's view will be heart of bond insurers courtroom arguments. Big questions for Judge Rhodes").

A donor intent law school exam

The NYT:  Fight Over Guggenheim's Legacy Roils her Palazzo.

And how did the French get involved?  What's this doing in a Paris court?

"The Sotheby's decision upholding activist pills is a huge win for good corporate governance"

Says Professor Bainbridge, though he adds that "Sotheby's then caved by putting Loeb and a couple of his cronies on their board" and recommends, "for good discussions of why Sotheby's caved," Alison Frankel here and Steven Davidoff here.

He also points to another key practical lesson of the case: the importance of email hygiene.

Loeb-Sotheby's Settlement (UPDATED)

Details at the NYT here.

UPDATE:  Who won?  The Times declares it a "clear win" for Loeb.  The Art Market Monitor disagrees:  "[I]t is hard to credit [that] conclusion since he was offered a board seat and has basically wound up with … a board seat. ... The compromise blunts his three seats with an additional two giving Loeb little more in the way of power. Yes, Loeb will be allowed to increase his stake from under 10% to 15% but without a clear plan to increase revenues substantially, that increased stake may only be a gift to present shareholders who sell to him in the coming weeks."

"One winner from inequality — artists" (UPDATED)

Matthew Yglesias at Vox.

UPDATE:  A different take from Henry Farrell:  "I would furthermore speculate (and this is speculation, but, I think, grounded speculation) that these tendencies towards skew are going to be substantially accentuated by increased wealth inequality, as very rich people compete over a tiny pool of premier artistic prestige goods, dramatically driving up the prices for this pool and this pool alone, while leaving the middle and the tail of the distribution to languish and stagnate."

Jail Time for Nahmad

A year and a day.

"I think I could really teach young people in a good way and hopefully introduce them to a world they might otherwise never visit."

The New York Times:  Art Dealer Seeks to Avoid Prison.

Is inequality good for art?

From Tyler Cowen's review of Piketty:

"Piketty fears the stasis and sluggishness of the rentier, but what might appear to be static blocks of wealth have done a great deal to boost dynamic productivity. Piketty’s own book was published by the Belknap Press imprint of Harvard University Press, which received its initial funding in the form of a 1949 bequest from Waldron Phoenix Belknap, Jr., an architect and art historian who inherited a good deal of money from his father, a vice president of Bankers Trust. (The imprint’s funds were later supplemented by a grant from Belknap’s mother.) And consider Piketty’s native France, where the scores of artists who relied on bequests or family support to further their careers included painters such as Corot, Delacroix, Courbet, Manet, Degas, Cézanne, Monet, and Toulouse-Lautrec and writers such as Baudelaire, Flaubert, Verlaine, and Proust, among others."

It's "disgusting people are allowed to go around displaying art on walls without getting permission."

Says Banksy.

An International Perspective

My friend Massimo Sterpi has co-edited a new title, The Art Collecting Legal Handbook.  Check it out.

"Protecting collectors, it's not our job. I don't think putting the burden of that due diligence on an artist estate, especially in the absence of sufficient legal protections, is appropriate."

That's Michael Straus, chairman of the Warhol foundation, making good sense in this Wall Street Journal piece on "the deep freeze in art authentication."

"Looks like another Visual Artists Rights Act lawsuit in the city that loves its murals."

Via Sergio Muñoz Sarmiento.

"The question now is whether the old cases upholding the poison pill will still apply in the case of activism."

"This is the fundamental question in the Sotheby’s case."

Good piece from Steven Davidoff in the Times a few days ago on the broader significance of the Daniel Loeb lawsuit.

"The show marks a victory lap for the artist and the gallery."

Dan Duray on the upcoming Richard Prince Canal Zone show at Gagosian.

"Preet Bharara, the United States attorney for the Southern District of New York, said the charges 'paint a picture of perpetual lies and greed.'"

Indictment unsealed in the Knoedler-Rosales case.

Another arrest in the Knoedler case

Spanish art dealer Jose Carlos Bergantiños Diaz, Glafira Rosales's boyfriend.  Rosales plead guilty in September and "has been cooperating with the federal authorities."

Is copyright out of control?

Alex Tabarrok thinks so.

Piketty and the Art Market

"Although art is one of the few subjects not mentioned in the index of Mr. Piketty’s 685-page opus, it is worth considering how the unprecedented amounts of money the wealthy have recently been spending on trophy artworks might be a natural extension of his argument."

"A Bankruptcy Court meeting of creditors is set for April 29 in Los Angeles."

The LA Times has some details regarding the Perry Rubenstein Gallery bankruptcy filing.

"The artist is outside the state, the buyer's outside state, the property's outside the state."

It's always risky to read too much into oral arguments, but things did not seem to go well for the plaintiffs in the Ninth Circuit in the California resale royalty case.  Courthouse News Service has a summary here.  You can listen for yourself here.

The AAMD might be forced -- with regret -- to sanction the hell out of the Delaware Art Museum

What choice do they have, really?

It's not as if it was "a difficult -- indeed, agonizing -- decision" on the part of the museum, a problem that "does not admit of easy solutions."  Where'd you ever get that idea?

"The latest deal — which comes after separate accords with two global banks and unsecured bondholders — could hasten the city’s emergence from bankruptcy and speed the city’s plans to reinvest in services."

Getting close in Detroit.

"The tax strategy is 100 percent legal, experts say, as long as all stages of the museum transfer are handled correctly."

There was a terrific piece by Graham Bowley and Patricia Cohen in the Times over the weekend on a "lucrative, little-known" maneuver for avoiding state use taxes on art.

Doesn't work in New York -- as the story notes, "collectors who live in states that don’t recognize a first-use exemption are out of luck. New York, for example, typically imposes a use tax — 8.875 percent in Manhattan — on art brought into the state by a resident, even if it is first publicly displayed elsewhere" -- but well worth reading.

"According to court documents filed Wednesday, investors are willing to pay or make loans of close to $2 billion for the masterpieces inside the Detroit Institute of Arts" (UPDATED)

Emergency manager Kevyn Orr says it isn't going to happen -- he says "we have no intention of selling art" and also correctly points out that "in a Chapter 9 [bankruptcy] you cannot compel the city to sell anything, not a park, not a zoo, not the DIA."

But here's a question:  at what point would such an offer become not disgusting?  Ten billion? Twenty billion?  Is there literally no amount of money where we would have to say "you know what, the money could do more for the city than the art"?

UPDATE:  Michael Rushton tweets:  "Detroit's violence, failed schools, decrepit public services, poverty: disgusting. Arts 'advocates' need perspective."

Shades of grey (UPDATED)

Let me recommend this really good piece on the situation in Delaware, by Timothy Rub of the AAMD.

Instead of the usual approach of this-is-an-easy-question-and-anyone-who-disagrees-is-a-repulsive-Stalinist-philistine-hater-of-art, he begins be acknowledging that "this was a difficult -- indeed, agonizing -- decision."

That alone seems to me to be a huge concession from the usual AAMD position on these things.

He goes on:  "Was it, however, the right decision?"  Some, he says, "accepting the argument that the only alternative was to close the Museum's doors, would agree that it was."  Others would "emphatically" disagree.

Again, a rare concession that there are two sides to this debate.

He asks whether there were "other options that the [Museum] might have explored?"  He says the answer is yes, though doesn't bother to "map these out" -- though the important point, to my mind, is that in doing so he concedes that "such problems do not admit of easy solutions."

He closes by saying that "whatever your opinion on this subject may be, I hope that you'll agree that it is worthy of a spirited public debate."  (I do!  I do!)

This seems to me exactly how these things should be discussed:

First, no one gets to shut down the debate by appealing to some magical "ethics" rules.

The question is always:  was it the right decision in the circumstances?

What will happen if the work isn't sold?

Have all other options been sufficiently explored?

Is it, all things considered, the right thing to do?

It's very similar to how people think about deaccessioning in cases where the sales proceeds are used to buy more art.  Sometimes it seems to make a lot of sense.   Sometimes it doesn't.   But the important thing is that each case is considered on its own merits.  There is no bright line rule.   Nobody gets sanctioned.

If that's the AAMD's new approach to the problem, sign me up.

UPDATE:  Here is a timely overview of deaccessioning issues from Charles and Tom Danziger.

"A recent decision in New York’s Supreme Court could cause chaos in art forgery cases."

I'm quoted in this Art Newspaper story on the (weird) authentication decision mentioned earlier here.

"On Wednesday, the police said that the paintings were, in fact, a still life by Gauguin from 1889 and 'Woman With Two Chairs' by Pierre Bonnard, both of which had been reported stolen from a London home in 1970."

They've been hanging on the kitchen wall of an Italian factory worker since 1975.

"If a museum’s collection is deemed fungible, why should private donors or government agencies fund its operations?"

LA Times art critic Christopher Knight reacts to the shocking news that the Met sold off more than 3,000 objects last year.

Three thousand little units of fungibility.  No wonder everyone is so upset with them!

I say we form a human circle around the building and, in one voice, just say no.

Down with fungibility!

Detroit Cuts Pensions Further

New York Times story here.

I checked with the spokesperson for the Deaccession Police, who issued the following statement: Not. Our. Problem.

Still Restrained

Dan Duray has the latest on the Four Seasons Picasso lawsuit.

Art law in the galleries

ARCA's Catherine Sezgin on an art-law related show at the D'Amour Museum in Massachusetts.

Art law in the movies

Derek Fincham on The Grand Budapest Hotel.

Tell me again about the public trust (it's a fire sale at the Metropolitan Museum of Art edition)

Speaking of the repulsive practice of deaccessioning artworks, the NY Post notices that the Met sold more than 3,000 objects last year alone.

That's 3,000 objects that, having fallen under the aegis of a museum, were held in the public trust, to be accessible to present and future generations.

I'm surprised it hasn't led to the dissolution of the museum.

The most interesting thing about the Post article is that we often hear from the Deaccession Police that one reason museums can't sell art is that it upsets donors, who will then be reluctant to give in the future (as I often point out, they never explain why donors don't mind when their works are sold when the proceeds are used to buy more art ... but leave that be for now).  Well, the Post tracked down the great-grandson of a donor of one of the pieces the Met sold ... and he was all for it!  "I would rather think of this being in a private collection or another museum where people can enjoy it," he said, "than in the basement of the Met where no one is going to see it."  Imagine that.

"Yes, communities benefit from famous paintings, but they also benefit from safer roads and better schools."

Cornell economist Robert H. Frank had a piece in Sunday's New York Times on Detroit and its art collection.

He urges us to look at both costs and benefits.  Take Pieter Bruegel the Elder's "The Wedding Dance," which could be worth $200 million by itself.  At a 6 percent interest rate (after rates "return to normal levels"), "the foregone interest on that amount would be approximately $12 million a year."  If the museum is open 2,000 hours a year, "the costs of keeping the painting on display would be more than $6,000 an hour."  If five people view it per hour, that's $1,200 an hour per visitor.  He guesses that "most taxpayers [would] think the same money could deliver much greater value if spent in other ways."

Michael Rushton, Director of Indiana University's Arts Administration Programs, says "those firmly against DIA selling art need to be able to respond to the arguments Robert Frank makes" -- but of course they'll do no such thing.  To the extent they even acknowledge the existence of his arguments (unlikely), they're more apt to call him names (repulsive Stalinist trickle down philistine) and try to figure out a way to sanction him.

"Proponents of the bill believe that it is necessary to incentivize experts to continue to authenticate works in light of the chilling effect of recent litigation."

Frankfurt Kurnit summarizes the proposed NY legislation protecting "authenticators," mentioned earlier here.

Via Sergio Munoz Sarmiento, who wonders if the bill "give[s] authenticators too much power?"

"But Mr. Parsons said Mr. Loeb ... faces 'an uphill battle' to show the pill actually puts him at a disadvantage."

The Wall Street Journal has the latest on Daniel Loeb's poison pill lawsuit against Sotheby's.

Should "assisting the truly needy be the central focus of the charitable contribution deduction"?

The Nonprofit Law Prof Blog thinks so.

How is the Artist Pension Trust doing?

Daniel Grant takes a look on its tenth birthday.

How is Amazon Art Doing?

Not so well, according to this Bloomberg News story.

How to be ethical in the art world

In two easy steps.

Step one:  when the Pennsylvania Academy of Fine Arts sells a $40 million Hopper in order to buy a bunch of contemporary art, say nothing.  Relax.  No reason to be so touchy.

Step two:  when the Delaware Art Museum announces plans to sell $30 million worth of art in order to keep from closing, get out the pitchforks.  Act as outraged as possible.  Rend garments.  And most of all:  PUNISH THEM.

A little thing called ethics, my friends.  Get with the program.

Release the hounds!

Randy Kennedy in the NYT:  Delaware Art Museum Will Sell Works to Pay Off Debt.

How dare they!?  Repulsive Stalinesque scoundrels.  Have they no decency?  Why can't they just fail quietly and go home?

I assume they will be sanctioned and sanctioned good.  This cannot stand.

Prince-Cariou Settlement

As anyone who is interested enough in art law to be reading this blog must know by now, the long-running Prince-Cariou fair use lawsuit has settled.  Terms were not disclosed.  Here is Randy Kennedy.  Here is Brian Boucher.  Here is Julia Halperin.

My take on this is that, after all the drama, we still have no idea what's fair use and what isn't and that's just a fact.

"Settlement Reached in Cy Twombly Foundation Lawsuit"

Two directors have resigned.

The AAMD has responded to the Randolph College deaccessioning with their usual persuasive reasoning

"Because we said so."

Hand-wringers gonna wring

The Art Market Monitor takes on the latest art world "ethical" controversy:  works being loaned to museums ... and then later sold.  Says the Monitor:

"Why this trend should be considered a bad thing... is not clear. The unstated premise seems to be that art gaining value because it has been recognized by curators is a bad thing. But isn’t that what the market needs to see more of? ... [W]ould it be a terrible thing for the public and the art historical establishment to have collectors eager to make loans, even becoming solicitous of curators?"

"Formally severing Detroit’s ownership of the DIA would be at once revolutionary and conservative."

Mark Stryker looks at the implications of the potential "grand bargain" in Detroit.

"In fact, the doctrine of mutual mistake is one of the most complex and confusing areas we encounter in our practice."

The Brothers In Law explain.

"Art world power brokers don’t know what to make of Maximo Caminero."

Jed Perl on the recent Ai Weiwei vandalism.

Does eccentricity raise the value of art?

Via the Freakonomics blog.

Another foundation sued over authentication

Last month it was Haring.  Now it's Calder.

This seems like a big deal

Getty Images is opening up the bulk of its photo collection for free.

Wait, what?

The NYT's Patricia Cohen reports on a new lawsuit by the Basquiat estate against Christie's.  Apparently they complain that Christie's "did not ask the estate's opinion on the authenticity" of certain works it's offering for sale, though, as Cohen drily notes, "the estate's authentication committee was disbanded in 2012."

"While Mr. Ai has defaced works to make new art, one difference is that, unlike Mr. Caminero, he owned the art before he ruined it."

The New York Times has the latest on the artist "who stunned the art world by smashing a vase by the Chinese Artist Ai Weiwei at the Perez Art Museum in Miami."

New Resale Royalty Legislation Introduced

Patricia Cohen has the story in the Times.  Lee Rosenbaum has a close analysis here, including the following:

"The amount of the royalty payable on a resale would be capped at $35,000.  This is a major collector-friendly change:  There was no cap in [the] previous bill."

New Orleans residents foil plot to steal Banksy mural

Story here.