Article: Corporate Art Collecting and Fiduciary Duties: (http://www.cblr.org/archives/2009.php)
The top-ranked Columbia Business Law Review recently published Denise M. Alter's article of first impression entitled, "Corporate Art Collecting and Fiduciary Duties to Shareholders: Legal Duties and Best Practices for Directors and Officers." The article addresses fiduciary duties and corporate governance concerns implicated when corporations collect fine art, and evaluates those duties and concerns in the context of best practices in fine art collection management. For a copy of the article, email Denise at denise.alter@bridgelawgroup.com.
Ninth Circuit Affirms Preemption of California's 10-year Statute of Limitations for Holocaust-era Art
The Ninth Circuit Court of Appeals affirmed, in part, a district court ruling preempting California's ten-year statute of limitations under California Code of Civil Procedure §354.3 extended to claimants seeking recovery of art stolen during World War II. Von Saher v. Norton Simon Museum of Art, No. 07-56691 (August 19, 2009). In its decision, the Court concluded that although the statute did not conflict with any current foreign policy espoused by the Executive Branch, it nonetheless ran afoul of foreign affairs field preemption. Limiting plaintiff to the traditional three year statute of limitations found in C.C.P. §338, the Court remanded the case to permit plaintiff an opportunity to amend her complaint. In construing the requirements of Section 338, the Ninth Circuit held that plaintiff's cause of action against the Norton Simon Museum "began to accrue when she discovered or reasonably could have discovered her claim to the paintings and their whereabouts.
Hastings College of Law Adds Art and Cultural Property Law
The U.C. Hastings College of Law has asked Bridge Law founder, Denise Alter, to teach her Art and Cultural Property Law course during the Fall 2009 semester. Denise has taught her course at U.C.'s Berkeley School of Law (Boalt). See http://www.uchastings.edu/faculty-administration/faculty/adjuncts-new/alter.html.
Bridge Law at SFADA
Bridge Law founder, Denise Alter, addressed members of the San Francisco Art Dealers Association at a panel event hosted by the Rena Bransten Gallery. Denise spoke about the Royalty Resale Act and cultural property laws to the full house of gallery owners and dealers present at the event.
Antiquities, Museum Donations, and Tax Deductions
A possible link between the market for looted antiquities and inflated tax deductions claimed by collectors for charitable donations to U.S. museums -- first reported to Bridge Law by Italian prosecutor Paolo Ferri -- headlined the news yesterday as federal agents raided the Bowers Museum in Santa Ana, the L.A. County Museum in Los Angeles, the Pacific Asia Museum in Pasadena, and the Mingei International Museum in San Diego. Search warrants issued by U.S. Magistrate Judge Carla M. Woehrle authorized federal agents to seize archeological resources, photographs, museum books and records, and computer data and equipment. IRS affadavits supporting the Bowers and PAM warrants alleged that Special Agent Bonny L. MacKenzie had probable cause to believe that acceptance by museum staff of antiquities donated by an undercover agent ("UCA") "enabled others to conspire to aid and assist in the preparation of false tax returns in violation of 18 U.S.C. section 371 and 26 U.S.C. section 7206(2)."
Congress and the IRS continue to scrutinize transactions among museums, collectors, and antiquities dealers to determine if they violate federal tax laws and U.S. cultural property protection laws such as the Archaelogical Resources Protection Act, as well as international convention and foreign cultural patrimony laws of countries like Thailand with valuable antiquities and archaeological resources.
Microsoft Art Collection, 2007 Annual Report
Microsoft Corporation issued its first annual report for the Microsoft Art Collection in fall 2007, which report highlights the ongoing relationship between the Microsoft Art Collection and Bridge Law Founder, Denise M. Alter. Since its inception in 1987, the Microsoft Art Collection has grown to several thousand works of art, making it one of the premier corporate art collections in the world. Bridge Law congratulates the Microsoft Art Collection for publishing its 2007 Annual Report. For more information about the Microsoft Art Collection, see http://www.microsoft.com/mscorp/ArtCollection/default.mspx.
New Tax Law Changes Impact Collectors/Museums
President Bush signed into law H.R. 4: The Pension Protection Act of 2006 - P.L. 109-280. Hailed as the most significant restructuring of pension laws in 30 years, the 2006 Act includes significant restraints on art donations. Under prior law, fractional gifting allowed donors of fine art to take a current tax deduction for a fractional contribution of art to charity, while still physically possessing the art.
The 2006 Act requires the charity recipient of the gift to take full ownership of the work of art within 10 years from the date of the initial fractional donation, or the date of the donor's death, whichever is earlier. The charity must also take substantial physical possession of the item during the 10-year period as long as the owner remains alive or use the item for a tax-exempt purpose, such as an exhibition. If these conditions are not met, the IRS will recapture the deduction with interest from the owner. Finally, after the initial fractional donation, the taxpayer is limited in his/her subsequent fractional donations to a deduction based upon the lesser of the fair market value of the work at the time of the initial fractional contribution or the fair market value at the time of the additional fractional contribution. The collector cannot increase the deduction if the work appreciates after the initial fractional gift.
Tax incentives for art donation have long been recognized as a mechanism utilized in this country for public support of the arts. Largely dependant on donations of art work from collectors, Museums fear the new laws will cause a dramatic decline in gifting. The tax law changes came in response to governmental concerns over donor abuses in fine art gifting and tax deductions. The law took effect on August 17, 2006.
Fellows of Contemporary Art
Bridge Law founder, Denise Alter, addressed the Fellows of Contemporary Art in Los Angeles, speaking about high profile art theft cases and their implications for collectors of contemporary art. Attendees at the event included major collectors, art dealers and appraisers, lawyers, and board members from Southern California arts organizations. Denise's article, Contemporary Collectors' Guide to Art Theft, is published on ARTelligenz.com at www.artelligenz.com.
Bridge Law Meets with Italian Officials
Bridge Law founder, Denise Alter, met with government officials in Rome last year to discuss the continuing problem of antiquities theft. Her interviews included Prosecutor Paolo Ferri, from the Pubblico Ministero, who is prosecuting former Getty antiquities curator, Marion True, General Roberto Conforti, Presidente of the Societa Italiana per la Protezione dei Beni Culturali and the former head of Italy's Carbinieri art theft division, as well as Ida Caruso, the Director of Archeological Assets of the Museo Nazionale di Villa Giula, who expects to receive looted Etruscan antiquities back from museums in the United States, including those recovered recently from the Metropolitan Museum in New York and from the Getty.
Art Law at Boalt Hall School of Law
Ms. Alter's semester course in Art Law at the University of California, Berkeley, School of Law, examines the complex legal issues confronting artists, museums, galleries, auction houses, dealers, conservators, and collectors in the acquisition and stewardship of fine art. The course explores comparative law issues involved in repatriating stolen art and antiquities, intellectual property laws and the visual arts, and international trade law in the global market for art. Guest speakers for the course have included Adine Varah, Esq., Deputy City Attorney for San Francisco and counsel to city museums, Laura J. Matzer, Art Collection Curator & Program Manager for the Microsoft Art Corporation, Jill Sterrett, Director of Collections and Conservation at San Francisco Museum of Modern Art, Heidi Zuckerman Jacobson, Director and Chief Curator of the Aspen Art Museum, Robert Korver, of the State Department's Cultural Property Advisory Committee, and copyright lawyer Andrew Stroud, Esq. For more about Art Law at Boalt Hall, see http://www.law.berkeley.edu/centers/bclbe/faculty/adjunct.html#alter.
