Legal counsel for the Art Gallery of Sudbury and Laurentian University have come to an agreement meaning LU has the right to eventually sell the Bell Mansion, but AGS can continue to use it as its gallery space for three more years.
The agreement also sets out the terms under which the Laurentian University can sell art in the gallery collection.
Due to the history of the relationship between the Art Gallery of Sudbury and Laurentian, assets associated with the gallery have been caught up in Laurentian’s insolvency restructuring process.
Documents regarding this matter were first filed before the courts early this spring, with a hearing originally scheduled to be held in May.
However, negotiations between the two parties continued until a consensual agreement was reached, and an endorsement signed June 17 by Chief Justice Geoffrey Morawetz, the judge who has dealt with most matters related to Laurentian’s insolvency.
After obtaining a copy of this agreement, Sudbury.com has reached out to both the Art Gallery of Sudbury and Laurentian University.
Art Gallery of Sudbury director/curator Demetra Christakos said Tuesday the gallery is finalizing a public statement, which will be made available within the next few days. She said it’s her understanding that there is still a legal document to execute.
Laurentian president Robert Haché issued the following statement on June 22.
"We are proud of the Laurentian University Art Collection, and we are grateful custodians of artwork that has been donated to the University and purchased by the university over the past 60 years,” the statement said.
“We have recently resolved the dispute raised by the Art Gallery of Sudbury which includes an acknowledgement that the art collection is not owned by, or the property of the Art Gallery.
“As part of that settlement, Laurentian has agreed that the Art Gallery is permitted to continue to occupy the Bell Mansion on the existing terms until no later than May 2025, and that any sale of the Bell Mansion by Laurentian will not be completed until that time.
“The full terms of the resolution are reflected in a written Endorsement issued by the Judge in the CCAA proceeding on June 17, 2022, which is available on the Monitor’s website."
The Art Gallery of Sudbury has its roots in the Laurentian University Museum and Art Centre (LUMAC), a gallery established in the late 1960s.
Laurentian University transferred operation of the art gallery to a community group called Art Gallery of Sudbury in 1997.
Although the intent was to officially transfer assets such as the Bell Mansion and the art collection to the Art Gallery of Sudbury, that never happened.
Last summer, the Art Gallery of Sudbury made a claim of nearly $6.4 million against Laurentian University with regards to a number of assets, including the Bell Mansion and its grounds, funds bequeathed to support the gallery, and the art collection and library.
The art gallery’s claim against Laurentian was denied by Ernst & Young, the firm acting as the court-appointed monitor of LU’s insolvency process, this past winter.
However, the gallery said this spring it had actually submitted this claim in error, and sought to withdraw its claim from the CCAA process, which is how the matter ended up before Morawetz.
Ernst & Young opposed the idea of the Art Gallery of Sudbury being allowed to withdraw its claim, saying it would be treating this claim differently from others.
In an April 13 report, Ernst & Young said LU “intends on selling the Bell Mansion, and may include it, or the proceeds of the sale, in the plan it will be presenting to the creditors.”
Ernst & Young also mentions the gallery’s art collection in the report. “The monitor also understands that LU is considering all of its options with respect to the assets of the art collection,” the report said.
The June 17 consensual agreement between Laurentian and the art gallery allows AGS to withdraw its claim against Laurentian.
The agreement also addresses both the Bell Mansion and the art collection.
With respect to the Bell Mansion, Laurentian will permit the art gallery to continue to use the building “consistent with its current use” until the earlier of: 90 days following the completion of construction of the Junction Centre (the as-yet-unbuilt, proposed new downtown home for AGS) or May 30, 2025 (referred to as the “vacate date” in the court document).
Laurentian will be free to sell the Bell Mansion, provided that any closing date for such a sale is not prior to the vacate date (as seen above), and the AGS undertakes not to take any steps to impede or contest the sale.
The agreement also said AGS will continue to be responsible for and pay the costs of maintenance at the Bell Mansion that it covers now, and on that basis, Laurentian will not charge rent to AGS prior to the vacate date.
The above terms will be binding on any subsequent purchaser of the Bell Mansion, with respect to AGS’ continued occupation of the Bell Mansion until the vacate date.
With respect to the art collection, the June 17 agreement acknowledges the complexity of this collection, in terms of any restrictions placed by donors. Family members of art donors have spoken out against the idea of donated art potentially being sold off to pay LU’s debts.
The agreement said “the collection comprises artwork that may have been donated with restrictions, donated without restrictions, that was purchased by Laurentian or others and was acquired from other sources.”
Laurentian will continue to comply with any applicable provisions or restrictions to which the artwork may be subject, the agreement said.
The agreement said that Art Gallery of Sudbury “will agree as part of the settlement that it does not own the art and, for all purposes, that it does not own or does not have any property interest or similar type of interest in the art collection” as well as the BA McDonald Funds (which was a bequest to the former LUMAC).
However, at the same time, the agreement between the two parties said “nothing in the settlement agreement will constitute the explicit or implicit acknowledgment by AGS that LU owns the art.”
Laurentian also confirmed as part of the agreement that it does not intend to take any steps to sell the art prior to a plan of arrangement implementation under the Companies Creditors Arrangement Act (CCAA) process.
“Following Plan Implementation, Laurentian agrees that it will give AGS 90 days’ notice of any intention to sell the Art that is managed or exhibited by AGS,” said the agreement.
The agreement said Art Gallery of Sudbury will continue to be entitled to exhibit the art subject to the same terms that has existed since a memorandum of understanding was signed in 1999 until the “vacate date,” subject to any new agreement being negotiated and agreed by the parties.
The two parties have also agreed “to engage in good faith discussions to determine if a new agreement on terms acceptable to both parties can be achieved, with the assistance of the court- appointed Monitor, with respect to the management and exhibition of the art and the costs and responsibilities in respect of same.”
Heidi Ulrichsen is the associate content editor at Sudbury.com. She also covers education and the arts scene.