Opponents of the Berkshire Museum Sale May Have Just Found an Ingenious Legal Loophole
The museum's members have filed a new lawsuit in an attempt to halt the planned sale.
In yet another attempt to halt the planned sale of works from the Berkshire Museum’s collection, a group of museum members filed a lawsuit in Boston today. The heirs of Norman Rockwell, whose work is headed to the auction block as part of the sell-off, and other museum donors filed suit in another county last Friday.
The new complaint, lodged in superior court in Suffolk, Massachusetts, is nearly 100 pages long—and lays out a novel argument. The members allege that the museum has reneged on its obligations to its supporters by putting the works up for auction.
The attorney for the plaintiffs, Nicholas O’Donnell of Sullivan & Worcester, explains to artnet News that this lawsuit is coming at the issue “from a membership angle.” Under Massachusetts law, he says, members of a nonprofit are treated like shareholders in a corporation. Therefore, he argues, the relationship between the corporation and its governing charters and bylaws must be treated like a contract.
“Our view is that the museum’s actions breach that contract and that my clients, the members, are the ones to enforce it,” O’Donnell says. “If the shareholders are concerned about the direction of a corporation and they demand that the officers do something and they refuse to do it, then they can bring what’s called a derivative suit… essentially, to protect the company from a harmful course of action.”
The members also claim that the sale was announced “without warning,” that the museum’s justification “withers under scrutiny,” and dismiss the plan as “a solution in search of a problem.” Without intervention by the court, the suit alleges, the museum will do “irreparable harm to its purpose and to its duties and obligations to its donors and parties.”
In August, the Massachusetts attorney general’s office launched an investigation into the Berkshire for possibly violating state laws that govern the deaccessioning of material donated to nonprofit institutions.
In both the lawsuit and a cease and desist letter sent to the museum, O’Donnell says, “We encourage the attorney general to use her authority to stop the sale. We don’t care which development stops the sale. We just hope that the sale will be stopped.”
The attorney general’s office did not immediately comment on the latest suit. Following the news of the Rockwell suit last week, a spokesperson told artnet News: “Our office has been closely reviewing the proposed transaction to see how it comports with applicable charities laws, including whether there are any restrictions on the museum’s ability to sell these items. We will closely review the filings in today’s lawsuit as part of our ongoing review.”
The Boston court will hold a hearing on November 1 to determine whether to temporarily force the museum to put the sale on hold.
For its part, the Berkshire has said that the sale of the artworks is necessary to fund essential renovations of its 114-year-old building and to rebrand itself as a mixed-use art and natural history museum. Their proposal has renewed national debate over deaccessioning.
Responding to the suit, a representative for the museum said in an email that the filing “presents detailed and specific facts proving as deeply flawed the arguments of those attempting to block the sale.” The museum insists that the board of trustees “unequivocally fulfilled its fiduciary duty in undertaking an exhaustive, diligent and inclusive process to address urgent and serious financial challenges threatening the future of the museum.”
Further, “there are no restrictions on the works offered for sale,” the spokesperson said, noting that Rockwell’s Shuffleton’s Barbershop, which carries a $20 million estimate at Sotheby’s, “is not and was never subject to any restriction prohibiting its sale.”
The museum’s board president, Elizabeth McGraw, added: “We are confident that the court will affirm the museum’s position.”
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