BENTONVILLE — A Tennessee high court has upheld a deal for Nashville’s Fisk University and a Bentonville museum to share the university’s Stieglitz art collection, and overturned a lower court ruling requiring Fisk to sock away two-thirds of a $30 million payment in an endowment to maintain the artworks.
The ruling issued Tuesday by the Tennessee Court of Appeals also remands the case back to Davidson County Chancery Court to work out the details.
Barring more appeals or changes in an already revised agreement, the ruling would allow Crystal Bridges Museum of American Art to move forward with a plan to pay Fisk $30 million for a half-share in the 101-piece Alfred Stieglitz Collection.
The high court in Nashville described the deal as selling a 50 percent “undivided interest” in the collection to Crystal Bridges.
The arrangement approved by the trial court late last year meant the Modernist art collection, donated by the late American artist Georgia O’Keeffe, could be displayed at Crystal Bridges on a rotating basis every two years beginning in fall 2013, while still being displayed in Nashville half the time.
For residents of the two Southern states, the impact of the case involves access to the artworks that each would have under the rotating custody arrangement.
For the museum and legal worlds, it raises questions that include: To what extent must a beneficiary respect a donor’s wishes versus liquidating a gift to raise cash? If circumstances change after the donor’s death, can the terms of a gift be changed, either to raise money for more artworks or to pay mundane operating expenses?
Much of the case has turned on a New York legal doctrine known as “cy pres,” which the opposing sides have debated.
The cy pres doctrine allows courts of equity to amend the terms of a charitable trust or gift when unforeseen circumstances make the donor’s wishes “impossible or impracticable” to carry out.
Writing in their 2-1 majority opinion, the Tennessee justices said that it was the second time for the case to come before them.
The first time, the highcourt found that neither Fisk nor the trial court had established whether “literal compliance with the conditions imposed by Ms. O’Keeffe are impossible or impracticable.”
After trial, the lower court found in August 2010 that circumstances were impracticable and Fisk got cy pres relief. In November of that year, Davidson County Chancellor Ellen Hobbs Lyle issued a final ruling.
Later, the opposing sides - Fisk and the Tennessee attorney general’s office - appealed, but for different reasons.
For years, the attorney general had been fighting the deal and wanted to keep the art in Nashville, while Fisk said the $20 million endowment requirement was excessive.
In writing for the majority, justices ruled Tuesday: “The court’s authority does not extend to requiring an endowment.”
But they added: “We do not preclude the court fromapproving an endowment or other dedicated source of support in the event such a proposal is presented.”
On Wednesday, a spokesman for the Tennessee attorney general, Sharon Curtis-Flair, said the office has 30 days to appeal.
“The only statement we’ve made is that we are reviewing the opinion and will be evaluating our options,” she said.
Laura Jacobs, communications director for Crystal Bridges, said top administrators there were traveling thisweek and hadn’t had a chance to review the opinion.
In October, museum founder Alice Walton said she was proud to have made an offer that would keep the Stieglitz collection intact and which comes as close as possible to O’Keeffe’s wishes, but also would help Fisk financially.
Fisk University didn’t respond to phone calls Wednesday, but posted a statement by its president, Hazel R. O’Leary, on its website.
“Fisk is healthier today than it was yesterday,” the statement read in part. “We look forward to working out the details with the chancery court and the attorney general.”
O’Keeffe, described in the court’s majority opinion as a Modernist painter, was married to Stieglitz, who was a photographer, gallery director and collector. She died in 1986, four decades after her husband’s death.
The collection comprises 97 pieces from Stieglitz’s estate and four paintings from O’Keeffe’s personal collection, which she donated to the historically black university roughly 60 years ago.
Northwest Arkansas, Pages 7 on 12/01/2011