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Last post discussed the legal issues surrounding museum loan agreements. This post continues the discussion of museum loans with a look at loans coming into the U.S. from abroad. When exhibition descriptions use the phrase “supported by an indemnity from the Federal Council on the Arts and the Humanities,” or similar language, the organizers have taken advantage of the laws that provide immunity from seizure and indemnification in the context of international loans.

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Museum loans have many benefits. Generous lenders serve the public good by making works available for display and exhibition both here and abroad. Lenders should have a passing familiarity with legal issues surrounding museum loan agreements because the agreement is designed to govern all aspects of the loan throughout the specified term. What follows is a brief description of the basic provisions of loan agreements and some issues collectors should consider when lending art to museums.

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By Christine Steiner and Valentina Shenderovich

The long-ago Russian Revolution has been fought anew in the Federal courts in New York. The case is Konowaloff v. Metropololitan Museum of Art, and it involves a lawsuit seeking to recover a Cezanne painting seized in the aftermath of the Russian Revolution. In December, the United States Court of Appeals for the Second Circuit affirmed the dismissal of the case, holding that the act of state doctrine barred plaintiff’s action. The Konowaloff case is interesting because it may be seen as an attempt to extend to Bolshevik-loot claimants the steps that U.S. museums have taken to address art expropriation in Nazi-loot cases. The Konowaloff decision makes clear that plaintiffs seeking recovery of, or compensatory damages for, art seized by decree during the Bolshevik/Soviet regime will not succeed under the act of state doctrine – at least not in New York.

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Auction houses typically do not disclose the identity of the seller on their sales contracts. A recent New York trial court decision may drastically change that longstanding practice.

The auction trade is supply-driven. As such, it heavily depends on sellers - and those sellers usually want to remain anonymous. Consignors have various motives for keeping their identity anonymous. They may want to avoid having relatives or creditors know they sold family valuables, or do not want the public knowing what is "none of their business". Dealers may not want the public to know they are selling stock. There may also be unsavory motives at play, though reputable auction houses carefully vet both the seller and the goods.

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Art blog and news source Art Van Africa interviewed Robert Darwell, head of Sheppard Mullin’s Transactional Entertainment, Technology and Advertising Practice Group, on the criminal trade of art theft. To read the exclusive interview, visit http://www.artvanafrica.com/robert-darwell-on-art-theft/.

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We conclude our series on public art and percent-for-art programs by focusing on a recent case involving the respected American sculptor, Alice Aycock. The artist’s sculpture, Star Sifter, was created in 1998 for the John F. Kennedy Airport, New York City. The recent lawsuit was prompted by the planned removal, and thereby destruction, of the commissioned work of art.

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As we described in our previous post, percent-for-art programs are successful and popular. However, because there are few common norms in the field or understandings regarding implementation of program initiatives, the importance of thorough negotiations and carefully constructed contracts cannot be overstated.

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The Art Law Blog introduces the first in a series of three articles on "percent-for-art" programs. The common purpose of percent-for-art ordinances is to invigorate the public cultural environment, and to develop and enhance public interest in the visual arts by creating enduring and specific art for public spaces. Some jurisdictions even articulate this goal as their “responsibility”.

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The prices fetched by famous artworks continue to astound industry-watchers. In spring 2012, Edvard Munch’s The Scream set the record for a work sold at auction—$120 million. Sales of contemporary and modern art have also been setting records. As the value of famous works climb, many collectors are motivated to warehouse their collections while they appreciate in value. The location of the chosen warehouse can also help reduce the taxes owed on such collections.

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An artistic work’s beauty may be in the eye of the beholder, but its valuation for taxation purposes is in the eye of the Internal Revenue Service. Recently, one of Robert Rauschenberg’s works captured attention for an uncommon tax and art valuation imbroglio surrounding the combine, Canyon. The IRS claims the work is worth $65 million and that the owners of the work owe $40 million in estate taxes for the work, despite having received three expert appraisals that held the work to be valueless.

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By Kathryn Hines and Manuel Gomez

This year, visitors to the Metropolitan Museum of Art were able to view Rembrandt’s Portrait of the Artist (ca. 1665), on loan from the Kenwood House in North London and in the United States for the very first time. Also this year, visitors to the Philadelphia Museum of Art experienced Van Gogh Up Close, an exhibition featuring some of the artist’s most innovative paintings, on loan from private collectors and museums worldwide, including the Van Gogh Museum in Amsterdam, the Centraal Museum in Utrecht, and the Hague. And, on the west coast from July 3 to September 23, 2012, visitors to the J. Paul Getty Museum will have the opportunity to see Gustav Klimt: The Magic of Line, the first retrospective fully dedicated to the drawings of the popular modern artist, on loan mostly from the Albertina in Vienna.

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The LA Chapter of ASA is proud to host this special event featuring: Debra Burchett-Lere, Acting President and Director of The Sam Francis Foundation and Christine Steiner, Art Attorney at Sheppard Mullin Richter & Hampton LLP.

A number of panels, organized by IFAR (International Foundation for Art Research), Christie’s, and the Catalogue Raisonné Scholars Association, have been held in recent months pertaining to the issues involving artists’ foundations, authentication, the legal environment, lawsuits, artists’ catalogues raisonnés, and the impact on the art market. The distinguished speakers, from both the art and legal worlds, will continue the dialogue.

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By Christine Steiner

The recent troubles of Knoedler Gallery, now airing in the press and later, presumably, in the courtroom, may shed some light on certain art world concerns – due diligence, gallery sale practices, sophisticated fakes/forgeries, and problems with authenticity in the market. This piece discusses the importance of carefully managing the business of artistic production. These considerations include strict inventory lists, transaction history, image and information database management, responsible studio control, and good artistic practices in general.

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By Christine Steiner

In the same era Gerald Ford advised his fellow Americans that “our long national nightmare is over,” as he succeeded Richard Nixon as president, the California Legislation enacted the sloppily-drafted California Resale Royalty Act, Civil Code Section 986. The act was not exactly a nightmare, in truth it slumbered for most of its thirty-plus lifetime. It seemed more honored in the breach than the observance. Recent awareness of the resale royalty obligation, though, has caused confusion and consternation for California sellers, for California artists and for the art trade nationwide. Some have, in fact, described it as a nightmare. As of late last week, the nightmare may be over.

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