Financial Crisis Provokes Deaccessioning in Europe

The New York Times reports on a trend among European museums to sell part of their collections to pay for acquisitions or meet other financial obligations as government cultural subsidies have been cut back. Other museums have sold artworks to offset the costs of failed state banks or other state debts. Whether the sales fund acquisitions or government budget cuts has significant consequences.

In Britain, the Northampton Museum lost its accreditation and eligibility for national grants when it sold an Egyptian statue to fund a museum construction project.  The British Museums Association questioned whether the money would be used for this purpose and disapproved of its use to offset budget cuts by the central government. The national Museums Association and ten other arts organizations, including the Arts Council England and the Heritage Lottery Fund, have announced that they will not work with museums who sell works for this purpose because it constitutes “a breach of trust with the public,” the public trust argument previously gutted by Donn Zaretsky.

In Germany, the sale of 400 works from the collection of a government-owned bank which folded in 2012 is currently debated by politicians, art experts, and local authorities. In November, a state-owned casino, WestSpiel, sold two Andy Warhol silk screens to fund another casino in Cologne.

French lawmakers have proposed the sale of artworks in storage at the Louvre. France may limit the works that can be sold to those that are duplicate works, not part of a core collection, the proceeds of which can only be used for future acquisitions. However, often the first consequence of falling subsidies is cuts of acquisitions funds; this model treats a symptom of the same underlying issue.

Financial Crisis Provokes Deaccessioning in Europe

Unfortunately Not All Things Considered on NPR's Deaccessioning Take

Greetings.

Here's a story NPR ran on deaccessioning yesterday, on their nationwide radio show, "All Things Considered."

I was initially approached for an interview concerning this story, but was not contacted again. This is unfortunate, not because I want my voice heard across all 50 states (or 57 if you're Obama), but because I think a hot and controversial issue such as deaccessioning should be approached in multiple ways, but also with as many diverse viewpoints as possible.

This issue is not one of simply selling or not selling; it's much more complicated than that. Granted, five minutes is not fifty minutes, but it's also ample time to present at least two positions with a third commentary on both.

I hope that next time NPR decides to tackle deaccessioning they tak a more nuanced and objective approach to this timely issue and to other art law matters.

Unfortunately Not All Things Considered on NPR's Deaccessioning Take

"Anyone who looks upon DIA as an ATM will be in for a shock."

I know. I haven't been posting here often but probably because, to be completely honest, the deaccessioning battle has pretty much been boiled down to sell and don't sell. There's very little interesting "stuff" being written about the philosophical aspects of relinquishing art and cultural objects for money, so why continue to simply post about institutions that do or do not do it, and those that get chastised for doing it.

Especially when bloggers like Donn Zaretsky have pretty much eviscerated the "public trust" argument to a myopic piece of Deathstar dust. Donn's got great arguments on his blog, and they're not knee-jerk reactions like the ones we tend to get from the deaccessioning police or, as I like to call them, those that shriek a deaccessioning fatwa. Check him out.

Meanwhile, Detroit. Yeah, what's up with Detroit? Here's a nice little argument from Eric Gibson of the WSJ arguing that creditors and pensioners should take what's on the table now given the unpredictable nature of the contemporary art market.

Hmmm, maybe. What do you think?

"Anyone who looks upon DIA as an ATM will be in for a shock."

Deaccessioning in a Nutshell

A nice and brief overview of the current state of deaccessioning...and the pitfalls, via Charles and Thomas Danziger. Nice hypo!

Deaccessioning in a Nutshell

Portugal Ponders the Sale of Their Joan Miró Paintings

Or I should say, the deaccessioning. Portugal is trying to pay off it's $110 billion debt, but if the Miró paintings only brought in $50 million or so, what kind of dent would that even make?

Via the paper of record.

Portugal Ponders the Sale of Their Joan Miró Paintings

Christopher Knight on LA MoCA's New Director and Deaccessioning

LA Times Art Critic Christopher Knight discusses LA MoCA's new director, Jules Vergne, and deaccessioning.

Christopher Knight on LA MoCA's New Director and Deaccessioning

To sell or not to sell?

Should the Detroit Institute of Art's collection, or at least 5% of it, be sold?

The Journal Times says "yes."

The Daily Caller says "yes," and add Belle Isle to the mix. On why the art should be sold, "Sure, the DIA is a wonderful feature for the midwestern city. But even more charming is a city with streetlights that work, garbage that is collected, and a police force that can keep a city safe."

We will know the value of 5% of the collection tomorrow.

To sell or not to sell?

Christie's values Detroit's art collection between $452 and $866 million

Yep. That's million. Guess they don't have any Francis Bacons lying around, just a few masterpieces by Bruegel, van Gogh and Cézanne.

Today, Christie's said it has appraised some of the Detroit Institute of Arts' collection and said the works had a fair market value of $452 million to $866 million. It also suggested five alternatives to selling, which would allow the city to benefit financially while keeping the DIA collection intact.

And what are those five alternatives? Let's just say the first one is, as some say, robbing Peter to pay Paul (is that the quote?). Detroit can use the collection as collateral for loans, and given Detroit's impeccable history in paying off debts this will most likely get the vote for best solution.

File this under "Great solutions in history."

Christie's values Detroit's art collection between $452 and $866 million

Let them eat art!

Something tells me this is much ado about nothing, but here goes.

Yesterday (it's now officially 12:39am), federal judge Steven J. Rhodes ruled that the city of Detroit is eligible to file for bankruptcy.

What does this mean? Not much, unless you live in Detroit, you care about maintaining a romantic outlook on art, or you're in the business of buying and selling art. In all seriousness, what this means is that theoretically speaking the Detroit Institute of Art's collection could be auctioned off in part or in its entirety to help pay off the city's debts.

Why do I italicize "theoretically"? Because if you actually believe that that fire sale would happen then you are also likely to believe that the state of Texas would allow Jerry Jones to relocate the Dallas Cowboys to the state of Alabama.

This is actually quite sad. That contemporary art has come down not to art making or its content, but rather to the creation of drama by idle individuals about the extremely remote possibility of selling "canonical" works of Western art. Hysteria is more like it.

Here's a very stupid question: why would a city with an exodus of residents and engulfed in poverty, decaying architecture and unpaid bills want to sell off all or any of its city's art collection? I mean, this isn't Venezuela.

Let them eat art!

Getting Antsy, Detroit's Creditors Want Their Money!

The LA Times reports that creditors of the city of Detroit are applying pressure on local leaders to sell off artworks belonging to the Detroit Institute of Arts in order to get paid for debts owed. They're also asking that the city of Detroit cooperate in assessing the value of the art. 

Given the delay in assessing the value of the DIA's collection, one can certainly see why. What's taking so long? 

Getting Antsy, Detroit's Creditors Want Their Money!

Christie's Evaluation of DIA's Art Collection Delayed

A highly anticipated evaluation of thousands of city-owned treasures at the Detroit Institute of Arts is not expected to be finished until at least the second week of December. 

The report from Christie’s auction house in New York, which Detroit officials previously said would be completed in October or November, is expected to have a major impact on the fate of the museum’s world-class collection.

Via the Detroit Free Press.

Christie's Evaluation of DIA's Art Collection Delayed

Who's 'Profiting' from Detroit's Bankruptcy?

With Detroit's pending bankruptcy the debate over whether to deaccession the DIA's art collection is well known.

But other than the bankruptcy lawyers and restructuring experts, who else will profit from Detroit's bankruptcy? Marketwatch's Ben Eisen on how Christie's and Barclay's are just two other entities profiting from Detroit's bankruptcy.

Eisen's slideshow is certainly worth the read, but I'm not sure that 'profiting' is quite the right word to use in this situation as it denotes an intentional act. Let's face it, when there are problems and screw-ups, someone has to service and fix these problems. This is called providing services rather than profiting. Getting paid for one's time, knowledge, and application of those two factors is not necessarily synonymous with 'profiting.'

Who's 'Profiting' from Detroit's Bankruptcy?

In Detroit, Secrecy and the Private Bailing Out of City-Owed Pensions

The Nonprofit Quarterly pens a good article on two major problems with Judge Rosen's secret meeting with major private foundations in hope of brainstorming a financial solution that would exclude selling any or all of the Detroit Institute of Art's collection. The two major problems the NPQ sees are secrecy and the question of whether private foundations should be bailing out city-owed pensions.

The American public dislikes secrecy, no matter how you slice it. When foundations play into that, all their high statements about engagement and openness fly out the window. 

On the role of philanthropies in society, the NPQ has this to say,

But if their sense of civic pride or civic duty lures them into bailing out the city from the demands of its creditors, pensions or others, Detroit’s foundations will be not only depriving Detroit’s nonprofit sector of badly needed resources, but setting a very troubling precedent. How many other cities will lean on their civic-minded local foundations for bailouts like Detroit’s?

The entire NPQ article is available here.

In Detroit, Secrecy and the Private Bailing Out of City-Owed Pensions

The Remains of a Detroit Public Library

Those opposed to deaccessioning may want to take a quick peek at these eerie, and sad, images of the abandoned Mark Twain Public Library in Detroit.

The Remains of a Detroit Public Library

What do Detroiters & Michiganders think should happen with the DIA's collection?

Dear Reader: My good friend and soon-to-be art lawyer, Dani Johnson, has generously agreed to share her thoughts and research concerning the city of Detroit, its pending bankruptcy, and the possible deaccessioning of the Detroit Institute of Arts collection. Dani's first blog entry was published Monday, the second yesterday, and the last one today.

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Most pieces I’ve read in the press either adamantly oppose selling any art or strongly advocate for doing whatever is necessary to help the City financially, including selling some of the DIA’s art. After talking with family, friends, and friends of friends who live and/or work in the Detroit area about what they think should happen, the answers I’ve gotten can best be summed up as: it’s complicated.

Obviously no one wants to break up the DIA’s outstanding collection: in addition to the DIA’s importance as a cultural institute in the city, Detroiters are proud people, and the DIA is one of the last things they have to hang on to from the glory days of Detroit’s earlier years. On the other hand, obviously every one wants Detroit police officers and firefighters to get the pensions they’ve earned and for some of the other glaring financial problems of Detroit to be addressed.

What nobody knows is whether one will lead to the other. Even if the City is able to sell off some of the collection, will that money go to municipal workers’ pensions? Or will it go straight to the pockets of creditors? My understanding is that bankruptcy judges in similar circumstances do their best to keep assets like this in the charitable/public sector while fulfilling creditors from other assets, but the whole problem here is that Detroit is almost flush out of other assets. In either case, will selling the art provide a long-term solution? Many are concerned that it will provide only a temporary patch and then leave Detroit with nothing to make it a city worth living in. This is only an issue if you’re of the opinion that Detroit is capable of being revived and rebuilt—but certainly every Detroiter I’ve talked to is of that opinion. And with the recent influx of private investment into the City (namely Dan Gilbert buying up a good portion of the City), I have to say I’m hopeful that it’s possible, too.

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Dani Johnson is a recent graduate of Indiana University Maurer School of Law. During law school, Dani studied intellectual property law and founded the Society for Law and the Arts, a student organization that raises awareness for art law issues and career paths. Dani served as a Summer Associate at Volunteer Lawyers for the Arts in New York in 2012 and as the Trademark Office Assistant at Indiana University’s Office of Licensing and Trademarks in early 2013. Dani lives in Chicago and will soon be sworn in to the Illinois Bar. Dani may be reached at daniellekjohnson1@gmail.com

What do Detroiters & Michiganders think should happen with the DIA's collection?

What are the nuts and bolts of the Attorney General’s opinion?

Dear Reader: My good friend and soon-to-be art lawyer, Dani Johnson, has generously agreed to share her thoughts and research concerning the city of Detroit, its pending bankruptcy, and the possible deaccessioning of the Detroit Institute of Arts collection. Dani's first blog entry was published yesterday, the second today and last tomorrow, Wednesday, October 9th.
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Bill Schuette’s opinion points out that the museum was originally incorporated as a nonprofit corporation with a specific charitable purpose: the public exhibition of art. So, it was founded as a charitable trust, with the Founders Society serving as its trustees, the public serving as the beneficiaries, and the public exhibition of art being its charitable purpose. When the City accepted the transfer of title of the collection in 1919, the law that allowed this transfer (1919 PA 67) required that the City use the property to maintain a public art institute and continue exhibiting art to the general public. Schuette argues that under charitable trust law, the transfer was “a transfer of the Founders Society’s . . . legal title in its charitable assets to a new charitable trustee—the City.” Basically, Schuette says that in 1919, the City took over as the trustees for the museum, but the collection remains in trust for the public, and all of the City’s expenditures for the museum have been in operating that trust for the public, not on behalf of the City itself. Because of this, the collection is not a financial asset of the City or the Founders Society, and it cannot be sold to pay off any of their debts—rather, it must continue to be used for its original charitable purpose, which is the public exhibition of art.

Schuette’s arguments seem logical and well-founded. A loophole in the argument that comes to mind is the doctrine of cy pres, which allows a judge to modify a charitable purpose when the original charitable purpose is no longer feasible. Proponents of selling the artwork could argue that because of Detroit’s dire financial state, exhibiting the artwork at the DIA is no longer feasible or in the best interests of the public. However, it seems unlikely that a court would pursue that path: doing so would be to quite dramatically redefine the charitable purpose of the DIA in a way that really hasn’t been done before.

Another argument I wondered about was whether part of the collection—namely that part that was purchased with City money, rather than donated or purchased by the Founders Society—might be more vulnerable to being sold. Schuette addresses this in one of his footnotes, and says that such a notion is inconsistent with trust law. He argues that trustees must keep trust property separate from the trustee’s own property and to act otherwise would be a breach of charitable trust—the notion that the City has been in breach since 1919 is “untenable,” which Schuette argues further supports the conclusion that the entire collection exists, and always has existed, for the singular charitable purpose of the exhibition of art.

I’m surprised that this warranted only a footnote, as it seems like a legitimate concern that artwork purchased with City tax dollars would be more susceptible to sale than artwork that was donated. Is it possible that a court could find these assets to be separate, even if it means a finding that the City breached its duties as trustee? I agree that it doesn’t seem likely, but a court could decide this, and it may be a tempting way to go—selling off only artwork that was purchased with City money seems on its face reasonable and would likely garner less heat from the public than selling the entire collection or randomly choosing a few of the most valuable pieces to sell.

Tomorrow, what do Detroiters & Michiganders think should happen?
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Dani Johnson is a recent graduate of Indiana University Maurer School of Law. During law school, Dani studied intellectual property law and founded the Society for Law and the Arts, a student organization that raises awareness for art law issues and career paths. Dani served as a Summer Associate at Volunteer Lawyers for the Arts in New York in 2012 and as the Trademark Office Assistant at Indiana University’s Office of Licensing and Trademarks in early 2013. Dani lives in Chicago and will soon be sworn in to the Illinois Bar. Dani may be reached at daniellekjohnson1@gmail.com

What are the nuts and bolts of the Attorney General’s opinion?

How and Why Does the City of Detroit Own DIA's Art Collection?

Dear Reader:  My good friend and soon-to-be art lawyer, Dani Johnson, has generously agreed to share her thoughts and research concerning the city of Detroit, its pending bankruptcy, and the possible deaccessioning of the Detroit Institute of Arts collection. Dani's blog entries will be published today, tomorrow, and Wednesday, October 9th.

How and Why Does the City of Detroit Own DIA's Art Collection?

The DIA was incorporated in 1885 as a private, nonprofit corporation. Shortly thereafter, the City began appropriating money to support the museum. These appropriations raised concerns, a lawsuit was filed, and ultimately the Michigan Supreme Court decided in 1915 that the appropriations violated the state Constitution’s restrictions on a city’s lending of credit to an entity other than a public or municipal agency. After this, the museum began to struggle, and in response, the Michigan Legislature enacted a law (1919 PA 67) that allowed a corporation situated in a city empowered to maintain an art institute to convey its property to the city, so long as the property was used for the purposes for which the corporation was organized. Pursuant to this, the DIA transferred its collection to the City, while the nonprofit organization (today the Founders Society) continued to support the museum. This unique and problematic structure led the DIA to fluctuate in prosperity as Detroit experienced extreme financial fluxes and political problems over the last century.

In the wake of Governor Engel’s budget cuts to the DIA beginning in 1991, the Founders Society launched a fundraising campaign and raised over $25 million for the DIA, creating some space to formulate a long-term solution for the museum. In 1998, the City and the Founders Society reached an agreement under which the City retained legal title to the collection while the Founders Society had the exclusive right to acquire and dispose of the museum’s works of art.

Because of the convoluted nature of the structure, it’s been difficult to tell what rights the City has in potentially selling off any of the artwork to pay down some of Detroit’s debts. Earlier this summer, Michigan’s Attorney General, Bill Schuette, issued a 22-page nonbinding opinion that it would be illegal for the City to do so.

Tomorrow, What are the nuts and bolts of the Attorney General’s opinion?

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Dani Johnson is a recent graduate of Indiana University Maurer School of Law. During law school, Dani studied intellectual property law and founded the Society for Law and the Arts, a student organization that raises awareness for art law issues and career paths. Dani served as a Summer Associate at Volunteer Lawyers for the Arts in New York in 2012 and as the Trademark Office Assistant at Indiana University’s Office of Licensing and Trademarks in early 2013. Dani lives in Chicago and will soon be sworn in to the Illinois Bar. Dani may be reached at daniellekjohnson1@gmail.com

How and Why Does the City of Detroit Own DIA's Art Collection?

Socialists to Protest In Defense of DIA

With sloganeering such as, "Culture is a social right," "The art belongs to the people," "No cuts to workers pensions or city services!" and "No to banrkuptcy", a mass protest has been scheduled in front of the DIA this Friday, Oct. 4th.

If they can tell me how Detroit can keep the DIA collection intact, repair the potholes and broken streetlights, keep pensions at their original numbers, and NOT file for bankruptcy, I'd love to know so I can package that idea and sell it to our federal government. Talk about a money-maker! Thanks to my good friend, Dani Johnson, for the heads up on this one.

From the socialist's website,

No one should believe the claims that sale of the art will help save workers’ pensions. After they take the art, the banks will be even more eager to steal municipal workers’ pensions and to slash city services! The right to culture must be defended along with all the rights of the working class. 

The Socialist Equality Party and International Youth and Students for Social Equality are calling for a mass demonstration at the DIA to defend the DIA. We aim not to pressure the Democrats and Republicans, the bought-and-paid-for politicians of the banks, but to organize an independent movement of working people. 

To organize this struggle the SEP is calling for the formation of a Committee to Defend the DIA!

Socialists to Protest In Defense of DIA

Should the DIA Start Renting a Moving Van?

Nolan Finley, of the Detroit News,

In recent days, I’ve talked to three people at the top of the decision-making in the bankruptcy process. All said, without question, that at least part of the collection will have to be — their word — “monetized” before the bankruptcy is resolved.

But he wonders how much of the DIA collection will be up for grabs.