Second Suit Against Berkshire Museum Aims to Stop ‘Liquidation Sale’ [Updated]

Less than a week after the sons of Norman Rockwell filed suit against the Berkshire Museum, attempting to prevent it from selling art from its collection, another lawsuit has been lodged against the Pittsfield, Massachusetts institution.

This new suit, filed in the Business Litigation Session of the Superior Court of Massachusetts in Boston, comes from James and Kristin Hatt, who are members of the museum, and Elizabeth Weinberg, who canceled her membership following news that the museum would send 40 works from its collection, including two pieces by Norman Rockwell, to Sotheby’s in order to build its endowment, pay for renovations, and shift its operation toward a “New Vision” that would see it focus more on science and technology-driven displays.

The suit, which asks for a preliminary injunction to halt the sale, accuses the museum’s leadership of mismanagement and of violating statutes involved in its incorporation, breaching its contract with members. The plan to dispose of works at auction “was announced without warning, and the members of the Museum were not advised nor offered the opportunity to provide their input,” the suit alleges. It also argues that the “Liquidation Sale is an explicit violation of universally accepted tenets of museum management with regard to the disposition of cultural objects.”

The museum has said that it was running a structural deficit that could force it to close in eight years if its financial situation is not remedied. The first lots are scheduled to hit the block on November 13 in New York. The suit alleges that the stated financial “emergency” was “widely exaggerated and even fabricated.”

A spokesperson for the museum said the new filing was under review. In reaction to the suit brought by the Rockwell sons, who were joined by other plaintiffs, the museum filed a formal response today defending the actions of its leadership. In a news release, it also forcefully rejected allegations made in the lawsuits, arguing that there are no restrictions on selling any of the works that it plans to offer through Sotheby’s and that its board has been acting properly in order to save the institution.

“As dedicated trustees and members of the Pittsfield community, we undertook our fiduciary duty with diligence, transparency, and great seriousness of purpose to ensure that the Berkshire Museum would thrive despite the challenging times that threaten the museum’s financial future,” Elizabeth McGraw, the president of the museum’s board, said in a statement. “Every aspect of our plan will result in the Berkshire Museum’s continued growth in its 100-plus-year-old unchanged mission as a magnet for adults, children, art lovers, history, and science enthusiasts.”

“The documents filed today and the legal arguments within them demonstrate that the board of trustees acted responsibly and any claims to stop the museum’s plans are without merit,” William Lee of Wilmer Hale, which is representing the museum, said in a statement.

“The claims asserted in the lawsuit are factually flawed and without merit,” a rep for Sotheby’s said in an emailed statement. “Sotheby’s is confident that the court will conclude that the board of trustees of the Berkshire Museum undertook an exhaustive and inclusive process to secure the museum’s future, consistent with the founding principles of the institution.”

A hearing on the case is scheduled to occur in Boston on November 1.

“It is my clients’ view that the process leading to what the museum calls the ‘New Vision’ did not include any of the stakeholders, and therefore their rights as shareholders have been infringed,” said Nicholas M. O’Donnell, a Boston-based partner of the Sullivan & Worcester firm.

The plaintiffs argue that, as museum members, they should have been provided with information about how the New Vision plan was adopted, as well as acquisition and deaccession policies, which the museum’s board has not made public. In an interview, O’Donnell said that, after not receiving a reply to an earlier letter he sent to the museum about its practices, he sent a cease and desist letter last week. O’Donnell’s said that the museum replied, rejecting his clients’ claims, and saying that it would proceed with the sale.

The suit also alleges that selling the works, including pieces by Blakelock, Bierstadt, and Bouguereau, will gut the museum’s collection and “ensure that it will be impossible for the Museum ever again to be an art museum as contemplated by Crane”—the institution’s founder, Zenas Crane—“and the donors of Artwork because the Museum will be shunned and retract into an empty shell of an institution.” (The museum has withdrawn from its affiliation with the Smithsonian, and professional organizations like the Alliance of American Museums and the Association of Art Museum Directors have criticized the sell-off.)

“Under corporate law, if a corporation is doing something that is harmful to it or inconsistent with what it is permitted to do, then shareholders can bring a derivative action,” O’Donnell said about the suit filed by Hatts and Weinberg. “The law is admittedly fluid, but there is support for extending this concept of a derivative action to the nonprofit context.”

Sotheby’s has shown some of the works in Texas, Hong Kong, California, and elsewhere, and the suit alleges that by sending these piece outside of Pittsfield and Berkshire County, the museum violated an 1871 charter that requires that pieces not be removed from the area. (There is some debate about whether that charter is still applicable and to what degree it has been honored in the past, as has been detailed in the Berkshire Eagle.)

The story has been developing at a rapid pace over the past few days. Earlier this week, the museum announced that its director, Van Shields, who had helped lead the rollout of the “New Vision” plan, was temporarily stepping down, likely through the end of the year, because of medical issues. In addition, the schedule of the lots being offered at Sotheby’s has changed for reasons that remain unclear.

“There’s a lot in motion in a way that’s not constructive,” O’Donnell said, “and what my clients want more than anything is for this to be paused so that cooler heads can prevail.”

Update, 5:10 p.m.: The museum’s legal filing and its latest statements to press were added.

Update, 9:45 p.m.: Added comments from Sotheby’s.