December 10, 2011
Appeals Court Keeps Fisk University Sale of O'Keeffe Collection on Track
The Wall Street Journal reports that a state appeals court has affirmed a lower state court's decision to permit the partial sale by Fisk University of the art colleciton donated to it by Georgia O'Keefe and also concluded that the lower court lacked authority to require Fisk to set aside two-thirds of the sales proceeds, or $20 million, as an endowment to maintain the collection. As we previously blogged, the planned sale is of a 50 percent interest in the collection to Crystal Bridges Museum in Bentonville, Arkansas. The Tennessee Attorney General challenged the sale in an attempt to keep the collection in Nashville. The appeals court's decision, with one judge dissenting, does not fully resolve the terms of the sale, however, as the court left the door open for the lower court to require some type of dedicated source of support for the collection and also requires Fisk to explain how it will use the sale proceeds. Fisk received the collection subject to the condition it not be sold or broken up, but Fisk is now asserting that its financial situation is so dire it cannot afford to display or maintain the collection without some type of sale. A summary of the trial court's decision and its conclusion are reproduced below.
Summary of Previous Proceedings
After finding that cy pres relief was available to modify conditions imposed by donor of artwork which had been gifted to Fisk University, the trial court approved agreements whereby the Crystal Bridges Museum would purchase a fifty percent interest in the art for $30 million and would thereafter share in the display and maintenance of the artwork. The court conditioned approval of the agreements on the requirement that Fisk establish an endowment of $20 million from the proceeds of sale in furtherance of the donor’s intent to make the art available for the citizens of Nashville. The Attorney General of Tennessee appeals, contending that the trial court exceeded the scope of remand and that the court erred in determining that the agreement with the Crystal Bridges Museum most closely reflects the donor’s intent. Fisk seeks review of trial court’s requirement that it establish the endowment.
State Appeals Court Conclusion
For the foregoing reasons, we affirm the trial court’s approval of the Revised Sharing Agreement. We reverse the order requiring Fisk to establish an endowment of $20 million from the proceeds of sale and limiting the funds available to Fisk from the proceeds to $10 million. The case is remanded for further proceedings in accordance with this opinion.
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