There are a couple of things I don’t understand about this story. So Marguerite Hoffman and her husband Robert donate their art collection to the DMA in 2005. But then, in 2007, Marguerite sells a Rothko painting because, after Robert died in 2006, her financial situation was shaky and she needed some liquidity. The first thing I don’t understand is how you can donate something and then sell it because you need the money. When the Hoffmans made their generous gift (along with the Roses and Rachofskys), they did so with the stipulation that they could continue to refine and edit their collection, and make reluctant sales if necessary. That makes sense. But what if Marguerite decided for some reason that she wanted to sell two more paintings — or everything she donated? It just seems like there’s a strange gray area here. What, really, does the donation consist of? Everything she doesn’t sell before she dies?
The second thing I don’t understand is the lawsuit itself. She sold the Rothko to a bloke on the condition that he keep the sale private. But then he turned around and sold it at auction — not very secret — for $31.4 million. The suit says Marguerite “was determined to avoid the embarrassment that she believed would ensue if the fact of the sale became public.” So why sue? Doesn’t that make this whole ugly business that much MORE public? And why be embarrassed? Because she needed some liquidity after her husband died and the market went to hell? I think a lot of wealthy people would understand that. Or would she be embarrassed because she gave something to the museum and then sold it?
I’m sorry. I’m not a good journalist. All I have is questions.
17 comments
I join you in your wonderment. Bewilderment? Isn’t it likely that the family took some tax considerations in the course of the now-in-quotes “donation”? I’m gonna want to read more.
I’ll try to help on the first part. If the Hoffmans made their gift by bequest in their Wills, then yes, Mrs. H can sell every piece if she wants to, absent a signed written agreement, supported by consideration, to the contrary. In fact, Mrs. H could most likely change her mind and write a new Will that excludes the DMA. The gift consists of her collection at the time of her death, and accordingly, I don’t believe that there are any tax benefits that have been taken, or could be taken until then.
As to the second part, I suspect that everyone in the art world knew about the sale by Mrs. H’s purchaser long before the lawsuit was filed and may have connected the dots. The rest of us, different story, so yeah, the filing of the suit certainly intensifies the spotlight.
The dispute is public now. Her Rothko was considered to be a lesser piece in the art world and most were surprised by the price realized at auction. Still she had an agreement with the buyer to keep it off the market. He violated that agreement. She gets no tax considerations until the collection is in the hands of the DMA.
So when does art transmogrify from sui generis to Tax Generous?
You SMU graduates in the audience may need a dictionary, or an educated friend, to help you here.
Well, if the purchase between Hoffman and the “Bloke” had been finalized and the art was in the Bloke’s hands and he chose to sell it at auction, how is that making the sale between Hoffman and the Bloke public? He didn’t publicize the exchange. He chose to sell HIS art piece at auction. He was the new owner, and that transaction was completely separate from the Hoffman transaction.
A donation is a donation. If you want the ability to “edit” a collection then don’t “donate” it – “loan” it to the museum. You don’t get the tax breaks, but later, if you decide to truly donate it item, you can get your tax break then.
Provenance. The ownership history of a piece affects it’s eventual auction price – by selling the piece at auction, rather than a private sale, the seller disclosed the pieces ownership history to the general public. My guess is he had agreed not to sell the piece at public auction as a term of the original sale.
$31.4 million and it doesn’t even have nudity?
My head hurts. I just wanna look at the pretty pictures.
Daniel,
I was waiting. I just KNEW you’d sign in on this.
Now we just need the guy with the six-year-old daughter who could paint a Rothko and the discussion will be complete.
Why is no one in the United States (except the curious one Culturegrrl) discussing what’s in the DMA’s own 2007 exhibition catalogue “Fast Forward: Contemporary Collections for the Dallas Museum of Art,” which includes the Rothko piece (also Jeff Koons’ Balloon Flower (Magenta), another permanent collection sale). On page 4 is “…unless otherwise noted, all works illustrated in this catalogue are either partial or promised gifts to the Dallas Museum of Art or are currently in the permanent collection.” On page 21 the DMA’s own former director Robert Lane states, “The grand utterly transforming moment came in 2005 when the Hoffmans, Rachofskys and Roses joined to commit to the Museum by IRREVOCABLE (emphasis mine) bequest their entire collections…” Do these two statements, which contradict the DMA’s action of allowing works to be pulled from its future, tell us the DMA lied to the public? As a U.S. federal prosecutor would say, there it is folks, in black and white. Is the museum staff, trustees, board of directors and others willing to testify in federal court about its fiduciary responsibilities to the taxpaying public? Council for Artists Rights – Chicago
Bill Marvel,
I’ll bet you were pissed off when Randy Newman made fun of midgets, too.
Fondly,
Daniel
@ John – I doubt that Mr. Lane’s letter in an exhibition catalogue captures the full scope of the legal contract, not to mention how vague it is. Their entire collection as of when? Death? The day of the gift? The third tuesday after the 2nd saturday of 2014?
Mr. Viramontes, please see: Rico (above) and educate yourself a little in wills. A bequest in a will doesn’t take effect until the bequester is dead (and the will has been probated). I could will you the deed to my house and all the things in it, but before I die I could sell off my CDs, give a favorite nephew all the change he can find in the sofa and let my cat pee on the carpets. Which is why, in a million mystery novels and TV shows, the heirs are eager to bump off Rich Old Granddad before he blows the family fortune on showgirls and keno.
In fact, even the passage you quote states “unless otherwise noted, all works illustrated in this catalogue are either PARTIAL or promised gifts …”
Since the painting was meant to be a gift to the DMA or traded for another piece, and we have no real idea if Robert Hoffman did indeed intend on any of the collection to be liquidated to support his family, my hopes are that she is splitting the $31m with his two daughters from his first marriage. That would seem like the right thing to do. Maybe she has already done that…I hope so.
Randy Newman was funny, Daniel. You ain’t. Funny covers a multitude of errors.
If anyone wants to read the actual petition filed by Hoffman’s attorney, goto:
http://www.scribd.com/doc/31267262/Marguerite-Hoffman-Amended-Petition
After reading the first few paragraphs, you’ll agree with me that the petition is excessively effusive, insipid, and maudlin.
A tricky case that brings up the problem of trying to control what a seller does once a transaction is made, although there are some larger interesting questions beyond Dallas losing a Rothko and the problems of an institution accepting a collection designed to be fluid.
http://theartoflaw.blogspot.com/2010/05/rothko-case-begs-questions-about-how.html