As Berkshire Museum art sale nears, Attorney General's Office gains ground - but takes a hit

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PITTSFIELD — The wait for a pivotal Berkshire Museum court ruling continued into the weekend, as legal briefs swelled a case file and the clock ticked down to a multimillion-dollar art auction.

When Berkshire Superior Court closed Friday, the Attorney General's Office had gained ground in the case, but not without taking a tongue-lashing from the museum's legal team, then countering with strong words of its own.

Judge John Agostini on Thursday allowed an emergency motion by the Attorney General's Office to switch its role, if need be, to that of a plaintiff opposed to the museum's sale of as many as 40 works from its art collection.

The office filed for that status late Wednesday, after determining that other plaintiffs might fail to cross the litigation starting line. In the motion, Attorney General Maura Healey asked that, if Agostini determined that other plaintiffs lacked standing in the case, her office be entered as a plaintiff.

Plaintiffs seek a preliminary injunction to stop sales by Sotheby's in New York City. The first sale is scheduled for Nov. 13, with three others that same week offering other works owned by the museum.

The Attorney General's Office said in an Oct. 30 brief that it believes the sales would be illegal because of restrictions on the works in question and the terms of charitable trusts.

Also, it alleges that museum trustees breached their "duty of care" by setting an unreasonable financial goal for the auctions, knowingly breaking ties with other cultural organizations and entering in a contract with Sotheby's that violated the museum's collections policy, among other reasons.

The closely watched case is considered precedent-setting because it might be the largest deaccession to date in the museum world in which proceeds would be applied, in large measure, to operational expenses.

Of the $60 million the museum said it expected to raise through the sales, $40 million would go into an endowment, with earnings drawn off to cover gaps in operational expenses.

Museum leaders say they acted to sell the works after determining that their organization could close within eight years unless it manages to stabilize its books.

Legal critique

The early sales, if they go forward, are predicted to bring the lion's share of proceeds, which the museum plans to use to renovate its 39 South St. facility and to bulk up its endowment to shelter it from future financial problems.

Attorney William F. Lee, representing the trustees of the museum, did not oppose Healey's request to join the case as a plaintiff. But in a filed response, Lee called the move "irregular," and he wrote: "This procedural maneuvering is too little too late, and bespeaks the AGO's perplexing desire to stop this sale at all costs, whether or not there is legal basis to do so."

Despite not opposing the change, Lee argued, in a response filed Thursday, that "it is deeply unfair to expect the Museum to defend against such a moving target."

After noting differences in stated positions between plaintiffs and the Attorney General's Office, Lee notes, "The Museum and the Court are left to guess at which arguments the AGO and the private plaintiffs may agree or disagree on."

Other plaintiffs in the case filed responses through their lawyers that offered no objection to having the Attorney General's Office shift its status to plaintiff, if other parties are disqualified.

They include residents of Berkshire County, museum members and three sons of artist Norman Rockwell, two of whose paintings, owned by the museum, face auction Nov. 13.

Though noting that the museum's legal team did not oppose its change of status in the case, the Attorney General's Office pushed back on Lee's characterization of its actions.

"The Museum now reports some unexpected confusion as to the AGO's position," the office says in a response.

In a 16-page "answer and cross-claim" filed near week's end, the office restated its reasons for opposing the sale of works from the museum's collection, a move the institution announced July 12 as a way for it to overcome a roughly $1 million yearly deficit and to renew its mission with a greater focus on science and nature programming.

Nonetheless, the Attorney General's Office claims that such a move would violate:

- Restrictions in state statutes against the sale of 19 of the 40 works of art;

- Donor intent regarding ownership of two Norman Rockwell paintings;

- Rules requiring that the museum seek permission because the sales "would constitute a fundamental transformation of the Museum, which may only be approved by the court after a showing of impracticability or impossibility."

In other words, on the last point, the museum would have to show that no other option would allow it to overcome a financial crisis.

Pushing back

In its most recent briefs, the Attorney General's Office refutes the museum's claim that it has waffled in its position.

"The Museum contends that the AGO is making an 'about-face' from its earlier filings," a brief filed Thursday states. "That is not accurate."

Lee, for the museum, has questioned why the state didn't file as a plaintiff early on.

The reason, the office explained late this week, is that it held off from filing at the request of the museum itself, with which it had been negotiating for weeks. That gave the museum a chance to respond on its own to the initial Oct. 20 civil action.

The Attorney General's Office then filed its own response to the lawsuit, since it had been named as a related party in its role as overseer of the state's public charities laws. The office claims that its position has been consistent — in opposition to the art sales.

"The AGO is not suddenly seeking 'to stop the sale at all costs' as the Museum alleges," the office says in its brief.

The emergency motion, it said, "merely ensures that the Court is in a procedural position to review the materials submitted by the AGO and the other parties with respect to potential injunctive relief."

Agostini told a crowded courtroom Wednesday that he would rule as soon as possible, noting the importance of the case. His decision is now expected Monday or later, within a week of the first auction date.

Larry Parnass can be reached at lparnass@berkshireeagle.com, at @larryparnass on Twitter and 413-496-6214.


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