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Buying Art from Academe Is No Cakewalk, Heiress Finds

A recent ruling by a Tennessee court may set the stage for Wal-Mart heiress Alice Walton to acquire a substantial stake in Fisk University’s prized Alfred Stieglitz Collection of 101 modern artworks, among them important paintings by Georgia O’Keeffe and Marsden Hartley.

NEW YORK—A recent ruling by a Tennessee court may set the stage for Wal-Mart heiress Alice Walton to acquire a substantial stake in Fisk University’s prized Alfred Stieglitz Collection of 101 modern artworks, among them important paintings by Georgia O’Keeffe and Marsden Hartley.

On Sept. 10, in the Chancery Court for the State of Tennessee, Davidson County, chancellor Ellen Hobbs Lyle rejected a proposed settlement between Nashville-based Fisk University and the Georgia O’Keeffe Museum in Santa Fe, N.Mex., that would have ended the latter’s lawsuit against Fisk and paved the way for the sale of two works from the collection.

The O’Keeffe Museum, acting on behalf of the artist’s estate, sued Fisk in early 2006, alleging that the university had breached the conditions of O’Keeffe’s 1949 gift to the school: 101 works from the collection of her husband, Alfred Stieglitz (1864-1946). Among the conditions of the gift was the stipulation that the works would be preserved intact as the Alfred Stieglitz Collection.

In late 2005, financially strapped Fisk had sought permission from the chancery court to sell two works from the collection: O’Keeffe’s Radiator Building-Night, New York, 1927, and Hartley’s Painting No. 3, 1913, considered among the most valuable works in the collection with a combined market-value estimate of $15/20 million.

The suit alleged that the university had breached the terms of the gift “by not displaying or properly maintaining the Collection.” Fisk denied the claim and countered that it had met the appropriate terms within the limits of its financial distress.

For several months in 2006, Fisk and the O’Keeffe Museum held discussions that resulted in an agreement calling for Fisk to send the painting to the O’Keeffe museum in return for $7.5 million. The museum would then allow the university to sell the Hartley painting, keeping whatever money was earned. Further, the museum would provide Fisk with a high-quality reproduction of Radiator Building and allow the original to be displayed at Fisk for four months every four years.

At the same time, Tennessee state attorney general Robert E. Cooper Jr., who oversees charitable organizations in the state, requested and won a notice period in which additional offers could be made.

In late August Walton sent a letter to Cooper in response to a public call for alternative proposals, offering $30 million for a “50 percent undivided interest” in the full collection that would ostensibly travel between the institutions.

“As an art collector and as founder of the Crystal Bridges American Art Museum,” Walton wrote, “I understand the importance of honoring a donor’s intent.” Walton, 57, is purportedly worth $15.5 billion and ranks ninth on Forbes magazine’s list of the richest Americans. The $50 million Crystal Bridges Museum is scheduled to open in the fall of 2009.

In an Aug. 31 filing in the chancery court, Cooper expressed opposition to the settlement, stating that “Fisk’s difficulties provide no legal basis to discard the restrictions placed by Georgia O’Keeffe against the piecemeal sale of the Stieglitz collection. This court should reject this proposal as a violation of the prior order of this court, counter to the interest of the citizens.”

A hearing was held on Sept. 6. Four days later, on Sept. 10, Chancellor Lyle issued a decision in which she sided with Cooper, rejecting the proposed settlement and offering support for Crystal Bridges’ proposal. Said the chancellor: “The Court concludes that the settlement is not in the best interest of the people of the state of Tennessee for several reasons. First there is the obvious reason that Crystal Bridges offers more money—$30 million is four times the $7.5 million offered by the Museum.” Furthermore, Lyle pointed out that Crystal Bridges’ proposal keeps the collection together.

In rejecting the settlement, the court acknowledged that the O’Keeffe Museum lawsuit against Fisk could proceed the following week, creating a risk that the entire collection could be forfeited and lost to the O’Keeffe museum.

However, one day after the court handed down its decision, O’Keeffe Museum board president Saul Cohen told ARTnewsletter that the museum had decided to dismiss its suit against Fisk since “our purpose was accomplished, which was to keep the collection together.”

It is unclear how this stance will play out given that Fisk is continuing its attempts to leverage its collection for cash. “I think the way it will work out,” Fisk counselor C. Michael Norton told ARTnewsletter, “is that Fisk will probably negotiate a transaction with Crystal Bridges or someone else.” Approval of any transaction will ultimately be up to the court.

Norton points out that the O’Keeffe Museum can step in to object to any further transaction that involves the sale or partial sale of the collection. He affirms, however, that Fisk is optimistic about the Crystal Bridges proposal since it keeps the collection intact.

Says Norton: “We were contacted by Crystal Bridges today. They want to talk about their proposal, and we’re going to listen.”

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