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"Frequently these things are less than black and white"

By Intellectual Property Law, Esq.

A lot of people seem very bothered by the news that the Orange County Museum of Art recently sold a group of 18 paintings. This time the trouble is not that the sales proceeds are to be used for something other than acquiring more art; rather, it's that the works were sold "to an undisclosed private collector," instead of at auction. There is also a question about whether the museum "got a good price for the works sold."

The AAMD is okay with the transaction. Its executive director says that "frequently these things are less than black and white" and that a private sale to a collector "isn?t in that level of egregious behavior" and "could easily be a very legitimate decision."

Two quick comments:

1. Does anybody know what the numbers are on deaccessioned works sold at auction vs. those sold privately? I could be wrong, but it certainly doesn't strike me as unprecedented for a museum to sell a work privately. Is there a new norm that museums must always sell at auction?

2. If the works were sold for less than full value, then that's another story. From Marie Malaro's A Legal Primer on Managing Museum Collections (2d ed. p. 227):

"Private sales, although not wrong per se, are more vulnerable to accusations of favoritism or inept bargaining by the museum. See, for instance, the complaint in Lefkowitz v. Kan, Index No. 40082/78 (N.Y. Sup. Ct. , N.Y. County, Jan. 3, 1978). (Kan, a museum curator, deaccessioned and sold certain museum objects to a dealer. Kan also collected personally and did business with the same dealer. The attorney general charged Kan with violation his fiduciary duties by not obtaining the best price for museum objects so that Kan could benefit in his personal transactions with the dealer. The case was settled in January 1983.) See M. Brenson, 'Auctions: The Museum Connection,' New York Times C17 (Jan. 6, 1984), for a discussion of disposal routes used by New York City art museums. Private sales to employees and trustees should be avoided because hey raise ethical, if not legal, problems."

Full post as published by The Art Law Blog on June 16, 2009 (boomark / email).