Filing details Shields' severance package from Berkshire Museum

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The Berkshire Museum agreed to pay its former executive director $92,000 to leave his post last June, a month after the institution sold a dozen of its most valuable works.

When Van Shields abruptly left the museum June 26, both he and his employer declined to speak about the financial terms of his departure, which came nearly one year after he trumpeted a "New Vision" for the 105-year-old institution that hinged on selling prized works from its collection.

But a final footnote in an audited financial statement for 2017 released Friday by the museum briefly describes the package Shields received.

The document also reveals that for the six months from July 1 to Dec. 31, 2017, the museum incurred $1.6 million in legal costs.

That period covers three months when the museum was fending off legal challenges to its art sales, both from two groups of plaintiffs, including the sons of artist Norman Rockwell, and the Attorney General's Office. The museum said it needed to expand its endowment by $40 million to cover recurring yearly deficits in a bad climate for fundraising. In a public meeting in July 2017, Shields showcased plans for major building renovations as well.

Also Friday, the museum released its IRS Form 990 for the same six months, as well as a corresponding state tax report.

According to the financial statement, Shields agreed to retire with a severance of "approximately" $92,000 that was to be paid in two installments, one before Sept. 1 and another on or before Jan. 1.

The detail on Shields' retirement agreement, reported in the last four lines of a 19-page financial statement, is one of the first disclosures of spending by the museum since it received proceeds from its art sales.

In an earlier financial statement released for the fiscal year through June 30, 2017, the museum reported that in April it had paid off the full $1,852,426 outstanding balance on a $2 million line of credit. That was the month it banked a net of $47 million from the first sales.

On Nov. 26, the 39 South St. facility announced it had raised $53.25 million from the sale of 22 works. It also said that trustees, despite a vote in June to seek the full $55 million infusion allowed by the state's top court, would halt sales.

The $53.25 million sum does not represent the total value of works sold through auctions and private sales arranged by Sotheby's in New York City. Rather, the total is the net amount received after subtracting various expenses, including legal costs.

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The $1.6 million in legal expenses reported on the museum's newly released IRS Form 990 does not include work performed after Dec. 31, 2017. Attorneys with WilmerHale, the Boston firm that represented the museum, continued to work through much of 2018. The year started with the museum's plan to sell up to 40 works of art still under scrutiny by Attorney General Maura Healey.

Though the museum reached an accord with Healey's office in February, its lawyers continued to advocate for art sales in court filings and appearances, including before a single justice of the Supreme Judicial Court for Suffolk County and the Massachusetts Appeals Court.

Lead attorney William Lee also worked to generate reports on the progress of sales for Healey's office, as required by the agreement the two parties reached.

The newly released statement for the last six months of 2017 covers a period before the museum received any proceeds from sales — and for that reason does not yet show any impact on the value of its investment portfolio. The museum last year changed its fiscal year to conform to the calendar year, requiring it to provide what's known as a "stub year" report.

However, Note 20 on the statement covers "subsequent events," a category commonly included by accountants in such documents in an effort to make them as timely and current as possible.

Note 17 on "related party" transactions reports that a company owned by a museum board member was paid $389,882 during the last six months of 2017, when that company also provided $18,087 through in-kind services. Though that board member and company are not named, they have previously been identified in court documents as Jeffrey S. Noble, president of Hill-Engineers, Architects, Planners Inc. of Dalton. According to the museum's IRS filings, it had paid the firm at least $578,000 since 2011.

After raising conflict questions about the museum's in-house dealings with Noble, Healey's office pushed the institution to rebid future work that could have involved the company.

Last month, the museum announced that it will seek competitive bids to waterproof parts of the building and make improvements to its loading dock and sewer lines. The anticipated costs of that work were not detailed.

The fate of a larger renovation project awaits the arrival of a new executive director, a museum spokeswoman said last month. A Washington, D.C., firm is conducting a search to fill that position.

The audit released Friday was performed by Adelson & Company PC of Pittsfield.

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


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