Katie and Steve give an update on the first round of auction sales as part of the Berkshire Museum’s court sanctioned deaccessioning plan. They discuss the results of the sales, the museum’s current stance, and where that leaves us (hint: dissatisfied). Resources: https://berkshiremuseum.org/newvision/the-road-ahead/ https://berkshiremuseum.org/2015site/wp-content/uploads/2018/04/pr.Berkshire-Museum-to-offer-13-works-at-auction.pdf https://www.nytimes.com/2018/05/27/arts/design/berkshire-museum-sanctions-aamd.html https://aamd.org/for-the-media/press-release/aamd-statement-on-sanction-of-berkshire-museum-and-la-salle-university Bonus Episode Transcription Katie Wilson-Milne: So, Steve, here we are again talking about the Berkshire Museum. Steve Schindler: This is our second update of the Berkshire Museum controversy. Katie Wilson-Milne: Yes. And we did a full length episode on the Berkshire Museum’s decision to deaccession 40 of its most valuable objects, which were all very expensive pieces of art, some of which had been with the museum since its beginnings and had significance to the Berkshire area and to the history of American art that the Berkshire Museum, at one point at least, captured. The museum justified the need for these sales by saying it needed to build its endowment so that the museum could stay open for the public and also to change the focus of the museum with the times to be more of a science and natural history museum than an art museum. So just to give our listeners a brief recap, there was public outrage after this decision was announced in July of 2017 and part of the criticism, right Steve, was that people felt the museum had not been transparent about its plans to sort of change its mission and renovate its building through the proceeds of selling off these works of art. Steve Schindler: The first that the public really heard about this was the leaking of the consignment agreement to Sotheby’s. Katie Wilson-Milne: That’s right, which already had been signed. Steve Schindler: Which had been signed and the works were scheduled to be auctioned at the November auction of 2017 which then precipitated a number of court actions, which we reviewed in our first episode. Katie Wilson-Milne: Right. And those court actions are pretty much moot given what happened afterwards. So there were two lawsuits both of them had multiple plaintiffs and they basically seeked to enjoin the sale of these art works by the museum. The Attorney General of Massachusetts, which has jurisdiction over charitable institutions in Massachusetts, as is the case in most states, did their own investigation, seemingly very concerned originally over the museum’s actions and it’s not illegal in Massachusetts to sell a museum’s collection, but it is ethically questionable in museum practice and it’s actually regulated in New York. So the Attorney General was doing their own investigation originally quite critical of the Berkshire Museum and then had an about face. Steve Schindler: The Attorney General who had who had stepped into the lawsuits and asked the court in Massachusetts to enjoin the Sotheby’s auction for last November and was successful in doing that on a temporary basis. The next thing we heard was that the Massachusetts’s Attorney General and the museum had reached an agreement which was then presented to the highest court in Massachusetts and that agreement allowed the auction of 40 works in three tranches which we discussed in the last update for up to 55 million dollars. And now on May 14th the first tranche, so to speak, was put up for auction and was sold for the most part. Katie Wilson-Milne: We know before the auction in May that one of the works, when we did our prior update on this, the most valuable work Shuffleton’s Barbershop, arguably Norman Rockwell’s greatest masterpiece, iconic to American art history, was purchased by a new museum in Los Angeles funded by George Lucas, The Museum of Narrative Art, being built as we speak to be opened in 2021, I believe. So George Lucas, for that museum, purchased this work -- we didn’t know the price, but now we are guessing on good information that it sold for about 30 million dollars. That work was not auctioned it was already sold under an agreement with the Attorney General that it would be sold to an American museum of 501 (c)(3) organization and with some kind of best efforts be on display for the people of Berkshires for some period of time and therefore at least on public display. It looks like that’s going to happen. Steve Schindler: Right. And then the other 13 works went up for sale. And the sale didn’t go that well. What we can see from public information is that the museum netted from the sale approximately 13 million dollars. It’s possible could be a little bit more because of an enhanced buyer’s premium that they may have negotiated that we’re not privy too, but we can also see that most of the works with only a couple of exceptions sold either at or below the low estimated prices, and the two of the works didn’t sell at all, because they didn’t hit the reserve price, as you may remember from our last episode talking about auctions – there is this secret reserve price that is set by the consigner and the auction house before the auction below which the works will not be sold. And one of the works was a Pazzini which was estimated for sale of between $700,000 and a million dollars and that was not sold, but more significantly was the -- Katie Wilson-Milne: Frederic Church – Valley of the Santa Ysabel, which was bought in at auction as you said Steve, but then we know was sold privately to the Pennsylvania Academy of Art, an institution in Philadelphia. And they bought that work for a price we don’t know. It’s apparently subject to a confidential sale agreement, but its estimate was between five and seven million. So we can guess conservatively it sold somewhere between three and five million maybe and so that’s an additional amount the museum ever received. Steve Schindler: What we do know that was that anyone who lives in the Berkshire Museum’s vicinity -- Katie Wilson-Milne: Yes. Steve Schindler: is allowed to go visit this work for free. Katie Wilson-Milne: In Philadelphia. Steve Schindler: Yes. Katie Wilson-Milne: Which is nice, and actually since it wasn’t in display before in the Berkshires, maybe that is somewhat of a step forward if not a long drive. Steve Schindler: For some. Katie Wilson-Milne: Right. So 11 of the works sold at auction, two have sold privately, and one hasn’t sold at all. So the museum then issued a carefully crafted PR statement on their website reporting on these sales and saying that they had received about 42 million dollars in proceeds so far. So we know that they have received about 13 million from Sotheby’s, so where’s that other 30 million? We know that they are not reporting on the Frederic Church sale to the Pennsylvania Academy of Art. So we summarized from that that the Shuffleton’s Barbershop work sold for about 30 million to the Lucas Museum. AAMD, or the Association of Art Museum Directors, has now formally sanctioned the Berkshire Museum. Previously, as we talked about it in our full length episode, AAMD and AAM, the American Alliance of Museums, had harshly criticized the Berkshire Museum along with other entities that have been involved in deaccessioning or threatened deaccesioning in the last few years discouraging the museum for taking this course of action. Well AAMD has now normally sanctioned them. And what does that mean? That means that the 240 or so members of the AAMD, all of the museums around this country, are now instructed by way of their membership in AAMD not to lend any works to the Berkshire Museum and not to collaborate with the Berkshire Museum on exhibitions. So it’s a pretty harsh sanction. So we also know that certain individuals in the art and museum community have come out and criticized public non profit entities for supporting the Berkshire Museum by buying these works. So arguing that American museums should not be seen to the supporting this kind of deaccessioning behavior by buying works from the museum that’s acted unethically. I think we can see the point in that, but also the reality is these works are going to be sold, and if they’re going to be sold, the options are they going to be sold to a private collection where they are never going to be seen again or not for really long time or they’re sold to a public institution where they will be seen. And these works were not being seen at the Berkshire Museum. We know they were not on display. So if the end result is that they end up on display in a public institution where the public can go for free or for very low cost to see them, I personally have a hard time criticizing that, but the argument has been made that that was an unethical choice by the museums. Steve Schindler: So where does this leave us? Katie Wilson-Milne: Still in no-man’s land I think, Steve, because they haven’t achieved the full amount they wanted to fundraise for 55 million, which they were adamant that they needed to keep the museum going, which they have court permission to do. They sold the most valuable works of art. Although they had 40 works on a list they are planning to sell, the works they’ve sold so far are by far the most valuable works. And we know from the museum that they were hoping, given the public outcry, that they would only have to sell these works and then they could call it a day and get out of the public eye and move on with their business. But they didn’t sell 55 million dollars worth. And what we don’t know is whether the museum will continue to sell works from these tranches to try to net the total 55 million or whether they’ll stop now to prevent more public outrage. Steve Schindler: Right. And we know that going to auction is a risky proposition, and this was a risk that presumably the museum and its advisors understood, but the works didn’t sell that well. And some of it was in fact kind of sad. The Alexander Calder for example, which was estimated to sell between two and three million dollars, this was the Double Arc and Sphere piece that was commissioned by the museum from Calder himself, was bought by the Calder Foundation for approximately a million dollars. Katie Wilson-Milne: Although I am not sure I think that’s sad. I mean, if three of these works went to non profit institutions, two of them will be on display. The Calder work, you know it -- it did sell for a bargain, but it sold for a bargain to Calder’s grandson who runs the Calder Foundations and is at least going back home to the group that arguably is best able to manage and promote Alexander Calder’s reputation and legacy. So I am not saying I support the fact that it was sold, but if it had to be sold maybe it’s for the best that it went to the Calder Foundation. Steve Schindler: Well I mean it’s -- it’s not a bad home for the piece although it is still the case that the entire sale was really predicated on some notion of an emergency that the museum was pressed to raise all of this money and it needed to raise it quickly. It wanted to sell the works this past November it couldn’t do that and it pressed for court approval to sell these works in May. And now that’s happened and now they’ve raised approximately 45 million dollars. And now according to their own website, they’re going to consider further how to move forward, and one just has to at least ask the question as to why it was necessary to put all of the most valuable works up at an auction in May when they might have spend a little bit more time, even if they were intent on deaccessioning these works, in trying to maximize their value through private sales. Katie Wilson-Milne: So we know that Sotheby’s is advising them and presumably Sotheby’s had everything to do with the estimates and something to do with the timing of the sale of these works. These were 13 works selected out of 40. I think with the idea and the museum is represented with the idea that they were the most likely to be able to net the 55 million right away to prevent the future sale of works. I mean that’s -- that’s the charitable interpretation that’s what the museum has told the public. Steve Schindler: There is one other thing we should talk about and that is to not to lose track of the amount of money -- Katie Wilson-Milne: Yeah. Steve Schindler: that is being raised here. And this is being written about in some of the articles that have appeared in the press, but whether it turns out to be 40 million dollars or 50 million dollars or 55 million dollars this is an extraordinary amount of money for an institution whose annual budget is approximately two million dollars a year. And again I think it raises a very serious question about why it is that the museum needed to sell 40 to 50 million dollars worth of art. Katie Wilson-Milne: Right. Steve Schindler: This is one the first auctions that I remember where there were protests outside of Sotheby’s -- Katie Wilson-Milne: Yeah. Steve Schindler: I think mostly led by the grassroots organization “Save the Art – Save the Museum,” which has really been responsible for keeping this issue in the spotlight and who were leading the protests at Sotheby’s. Katie Wilson-Milne: Yeah, absolutely incredible grassroots organization, many of whose members had never been engaged activists before. This was really the first issue that galvanized them and upset them, so they’ve done an amazing job whether you agree with them or not of getting public attention. Steve Schindler: So, Katie, what’s up next? Katie Wilson-Milne: So our next episode is going to be on censorship as it relates to art. So we’re going to try to cover both censorship issues that came up in the culture war of the 1990s from the right, continued censorship and its legal form as it exist today, but also pressure from the left now to rethink what kind of art should be in public exhibitions. There was a controversy this part year at the Whitney Biennial, also at an exhibition at the Guggenheim. So we’re going to talk about those controversies, how they relate to the law, or how they don’t relate to the law. Steve Schindler: We’ll hope to get that out very soon. Katie Wilson-Milne: The information provided in this podcast is not intended to be a source of legal advice. You should not consider the information provided to be an invitation for an attorney-client relationship, should not rely on the information as legal advice for any purpose, and should always seek the legal advice of competent council in the relevant jurisdiction. Produced by Jackie Santos.