A Tennessee Judge has decided financially troubled Fisk University can sell half ownership in its prestigious Alfred Stieglitz Collection of photographs and art for $30 million, if two-third of the proceeds are placed in a new endowment whose sole purpose would be to use its income to ensure the collection remains in Nashville, even if Fisk closes.
The decision by Judge Ellen Hobbs Lyle of the Chancery Court for The State of Tennessee, 20th Judicial District, Davidson County, Part III, stunned Fisk officials and the Tennessee Attorney General. For the past five years, the two have fought over various Fisk plans to monetize the collection to raise needed funds.
After a series of rulings by Lyle over the past three months, she was expected to give final approval to Fisk’s co-ownership plan with Fisk expecting to have full access to $30 million to pay off debts, rehab old structures, build new facilities and endow several chairs.
Lyle, asserting the collection was intended to help Fisk over the years not be used to raise funds to support it, essentially forces Fisk to choose between seed money ($10 million) toward rebuilding or foregoing the sale plan altogether. The Stieglitz Collection was given to Fisk in the late 1940s and early 1950s by the late Georgia O’Keefe with the condition it never be sold or moved from Fisk. It has an estimated value of $74 million.
Fisk President Hazel O’Leary questioned the division of funds. She said putting $20 million in what is essential a lock box to which Fisk will have no key, “…far exceeds the amount necessary to secure and maintain the collection.” Her statement was absent the name calling and biting words of more recent pronouncements, despite the setback. She said she “is studying the 35-page ruling and will discuss it with her Board and Fisk’s lawyers before deciding how to proceed.”
Tennessee Attorney General Bob Cooper, who has objected to the proposed sale but seen several of his collection plans rejected by the court, says he was “disappointed” by the court’s decision to approve the sale, adding judge Lyle’s opinion was “lengthy and intricate” and would be analyzed carefully as the state reviews its options.
In deciding to allow Fisk a legal exception to its agreement with O’Keeffe, Lyle said she was required by law to devise a plan for the future of the collection that closely aligned itself with the intentions of the donor, in this case O’Keeffe, and Lyle’s earlier findings that it was financially “impracticable” for Fisk to maintain and exhibit the collection.
“There was no general charitable intent by Georgia O’Keeffe to perpetuate the existence of Fisk,” Lyle wrote in her decision issued Wednesday. “”In terms of financial gain or value, Fisk was to be enriched by the presence of the Collection at the University. Accordingly, allocating Fisk $30 million from the sale of the Collection is out of proportion to the role Ms. O’Keeffe designed for Fisk, as revealed by the trial record, and that is the problem with Fisk’s plan,” Lyle wrote.
“Fisk plan allocates too much money to itself,” Lyle wrote. “None of the money is designated by Fisk for the Collection; none is designated by Fisk to advance Ms. O’Keeffe’s intention of providing Nashvillans access to the Collection. Moreover, Fisk states no specific plans for distribution of the $30 million. Furthermore, there was very little evidence presented at trial as to exactly how much Fisk needs to survive. Instead, Fisk essentially said –It takes money to make money.”
The judge said she had authority to grant Fisk an exception to the terms of the O’Keeffe gift under the cy pres legal standards accepted by the courts. However, she added, “Any failure by the court in fashioning a remedy, where practicable, that does not encompass Ms. O’Keeffe’s full disposition design, constitutes an abuse of discretion.” Thus, she explained, emerges her solution to help Fisk while honoring, as closely as possible, the donor’s intent.
Lyle said if Fisk closes, the $20 million “endowing and tied to the Collection” would be used by a new court-appointed custodian “to use to ensure that Nashvillians have access to the Collection. The Court concludes that this plan approximates and is proportionate to Ms. O’Keeffe’s considerations for the Collection of a Nashville presence and a role for Fisk.”
Under the arrangement the $20 would be “removed from Fisk” and placed with a foundation to conserve and manage the funds. Fisk would have no access to the funds or its management. The proceeds from the endowment could only be used to pay for Fisk’s obligations of display, care, maintenance and insurance of the Collection under the co-ownership agreement.
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