Fisk/Stieglitz Court of Appeals Arguments: How Crystal Bridges Could Have Withdrawn from Its $30-Million Deal

Tennessee Supreme Court building in Nashville, site of recent Court of Appeals oral arguments on Fisk's Stieglitz Collection

I recently obtained the voice recording of the entire 42 minutes of oral arguments by opposing lawyers in the never-ending Stieglitz Collection case, now under consideration by the Tennessee Court of Appeals. Both sides---Fisk University and the Tennessee Attorney General---are appealing from this decision by Davidson County Chancellor Ellen Hobbs Lyle. 

Near the end of listening to the June 28 legal wrangling, I experienced one of those memorable did-he-really-say-that moments.

From revelatory testimony by Fisk's own lawyer, it would appear that Alice Walton's in-construction Crystal Bridges Museum of American Art, at a pivotal moment in this protracted legal battle, had an easy way out of its deal to purchase a $30-million half-share in Fisk University's Stieglitz Collection.

Without explicitly stating that Crystal Bridges would prefer to disengage from the controversial plan, the museum's director, Don Bacigalupi, had revealed to me during a recent interview that his institution's holdings had grown so substantially that "we don't really need that [the Stieglitz] collection in the way I think it was perceived we needed that collection four or five years ago." [You can listen to the audio of that statement at the bottom of this post.]

Nevertheless, he asserted (probably correctly, from a legal standpoint) that his museum was contractually bound to honor its agreement with Fisk, contingent only upon court approval of the deal.

Bacigalupi added:

We're not a party to the litigation, so we have no effect on the litigation whatsoever. We're innocently standing by, awaiting the judge's outcome.

But in fact, Crystal Bridges needed to do more than just "stand by" for this deal to go through: Without the cooperation of the museum and its lawyers at a recent turning point in this court case, the controversial half-sale could likely have been scotched. Bacigalupi's assertion notwithstanding, the museum's proactive effort to save the deal did, in fact, have a significant "effect on the litigation."

Near the end of his verbal sparring two weeks ago with deputy attorney general Janet Kleinfelter, Fisk's lawyer, John Branham, noted that Chancellor Lyle had rejected both the plan of the Attorney General and the Fisk/Crystal Bridges deal for the future of the Stieglitz Collection, which Fisk wants to monetize, in order to improve its dire financial condition. Instead of approving either proposal, Chancellor Lyle in September had instructed Fisk (in Branham's words) to "come back to me with a revised agreement [the terms of which the judge outlined in detail], and then I'll look at it."

And then, Branham's kicker:

Frankly, I'm glad she [Chancellor Lyle] did. Most of them [the revisions] were beneficial to us. We had the power of the judge behind us, instead of negotiating with the Wal-Mart heiress [Walton]. We got a better deal.

If Crystal Bridges had wanted to find a way out of its agreement with Fisk, there was its chance: "The Wal-mart heiress" and the museum (which, its director said, didn't "really need" the collection anymore) could likely have refused to make changes that weren't part of the signed contract, extricating themselves from a transaction condemned by the Association of Art Museum Directors. The court had made it clear that it wouldn't approve the agreement as written.

In striving to satisfy the court, Crystal Bridges didn't just "stand by"; it agreed to strike a revised deal that was more advantageous to Fisk, in order to comply with the judge's wishes.

Nashville Public Radio, WPLN, recently ran a report on the Court of Appeals proceedings, which appeared as text on the station's website. Below, courtesy of WPLN reporter Blake Farmer, is the (unaired) audio for that report, which includes a soundbite of commentary from me, as well as the voice of Don Bacigalupi, excerpted from my interview with him last May at Crystal Bridges. (Click the arrow on the left side of the sound bar.)