American Arts Trust

The Montague Collection


The debt history owes the collector

Fifty years ago, veteran rhythm and blues radio personality, Nathaniel “Magnificent” Montague, who coined the expression "burn baby burn," realized the paucity of documentation on the African American experience. Montague asked a Jewish friend how he knew so much about the richness of the Jewish culture. The friend explained how important even a tiny piece of the past is — without a connection to the past, how can there be a future for any people? There is a direct link from one item to another that tells the story. And a collector becomes a culture's storyteller because he creates that story as he curates (read more Click to load a list of web sites on Art Collections ). Montague was hooked. He wanted to become a storyteller for his people and a lifelong passion and obsession was born. Montague began to amass more than 7000 pieces that chronicled the experience of the African American from slavery to the present. Some were rare, some were one of a kind, and some were saved from the dumpsters. Everywhere he went, he asked, rummaged, hunted. Montague's collection became a major one. Learn more about the great collections of African American art and artifacts (read more Click to load a list of web sites on African-American Art ).

 

Montague

 

Obsessions, however, often have a down side. As a collection of such fragile material grows, it needs money — lots of money. Acquisition, storage, protection and cataloguing costs grow exponentially as the collection grows. As a result, the very rich or big institutions control most major collections. But that can be tricky: if an institution becomes involved too early it can interfere with the collector's point of view. Montague realized this, but since he wanted his collection to be a gift to America, he thought only a major institution could make that happen (read more Click to load a list of web sites on Institutions housing African-American Art Collections ).

An object's value is not set by its price but by its resale price at auction. The first African American collectible auction was held in 1989 (read more Click to load a list of web sites on African-American Auctions ) at the prestigious Swann Gallery in New York City. The prices commanded at early auctions were excellent and Montague’s collection would have been worth $4-5 million. But he had run out of money to care for what he had. He asked for and accepted what he thought was a "gift" from Allen B. Klein. After his death, Klein’s son, Jody, suddenly did not view the money as a gift but rather as an interest-accruing loan, even though there were no signed papers and no agreed-upon interest rate. He went to court, lost, but then somehow won on appeal (read more Click to load a list of web sites on The Kleins ). In a last-ditch effort to protect the collection, Montague filed for bankruptcy.

 

Montague

 

Luckily, the bankruptcy trustee, Dotan Malech, was sympathetic and intent upon keeping the Montague Collection together if he could within the parameters of his fiduciary responsibility. In order to do so, he would have to show the court that enough money could be raised to satisfy the debt. He rounded up people to act as agents to bring in potential buyers, he took over responsibility to store the collection in a secret location and finished the cataloguing — making a sale much more likely, even as it added $500K to the amount Montague owed. Meanwhile, the opposing attorney pushed to go to auction as fast as possible (read more Click to load a list of web sites on The Montague Collection ).

The first cycle of news coverage raised quite a bit of interest, but no bids in a tough economy. A few months later, my wife saw a story about the waning effort to save the collection. She printed it out, walked into the AAT office, held it out and said, "This is what you guys are supposed to be doing. Do it" and walked out. Montague's story moved us. My partner, Ricky Schultz, comes out of the music business and knew of many of the players. Stirred by emotion and the chance to actually get started, we jumped in and devised a plan that would protect the collection, punish the greedy, reward Montague, launch our charity and, perhaps, secure world peace. The trustee’s reaction to our overly ambitious balloon was to pop it. So, we stepped back, focused and stated our goals more clearly.

 

Montague

 

First: keep the collection from the auction block. Second: keep it intact. Third: keep Montague’s name on it. Fourth: find the perfect home — where the greatest number of Americans could have access to it.

We researched...and researched some more. We determined the probable value and then the probable return if it went to auction. Everyone was basing the numbers being talked about on ten-year old auction prices. Prices and interest had come way down. We found and talked to some of the probable players. We interviewed other institutions that house similar collections. We sought out potential patrons. We interviewed the opposing lawyer. Something was wrong. A collection valued at $4 million could be purchased for half that and there were no offers? Was money that tight? We explained to the opposing attorney that if it went to auction at this moment, he might not get paid very much at all, but, if he gave us time we would raise enough that he could get his client all that he was owed. The lawyer didn’t care (read more Click to view the Court Papers ). Then we discovered that the company who did the evaluations was also one of the agents and without our knowledge was representing us. The trustee himself was now owed a large sum of money. Every major institution that would be a likely home had already looked, was interested, but was sitting on its hands.

 

Montague

 

None of this made sense. Maybe we had jumped in too fast or maybe we jumped down the rabbit hole. We regrouped again. Our Art is the Answer theories identified the institutions most likely to swoop in and help. Why hadn't they? Because they "already had collections" and they are "run by boards and committees" with "budgets and bottom lines" and they "think like businessmen." The idea of a point of view adding to the worth of a collection is a bit abstract. Collections are usually donated and endowed so there is no additional cost to the institution. So, why buy a collection when, at auction, they could get just the items they needed or wanted for their existent collections (allowing their curators to be the storytellers for Montague's efforts)? But this gave the AAT two things we could use to our advantage. One, a businessman hates to lose out on a good deal. Two, one of the voices on the selection committee probably wanted the "best" items very badly. We decided to play both angles. We would bid just high enough to meet the court's requirements in an attempt to trump competitive greed and passion in the hope that a low-ball bid would be seen as a slap in the face.

We asked the nervous trustee if that bid would give him what he needed to make sure the Montague collection could be kept intact? He thought the chances were good. Second, as a not-for-profit with no specific affiliation, we then suggested that others be allowed to pool money with us. He wasn't sure, but found the idea "intriguing."

 

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Remember, at this point we had no business cards, no bank account nor had we formally named a Board. So, we used another art form, commonly known as poker, and entered a formal bid of just over $1 million. It worked. Within five days, there were five bids on the table for the Montague collection, where in the previous eight months there had been none.

We hoped for a bidding war so that Montague would get some money; this had been in our original plan along with the idea of Montague staying involved with the collection doing oral histories, films etc. But bankruptcy laws prohibited that, so they went from goals to wishes. During the next few weeks, AAT worked on the remaining goals we had set for the collection and lining up potential patrons.

Next stop...the Las Vegas courtroom where the trustee was able to guarantee that the collection must be bought as a whole and kept as a whole with the Montague name attached. No part of the collection could be sold off. Then the judge ruled bids could be pooled with ours. Now we set out to learn as much as we could about each of the bidders. After court, all bidders were invited to go to the secret holding warehouse and view the Montague collection. We were fairly certain that the one "mystery" bidder was the Smithsonian (read more) Click to load a list of web sites on The Smithsonian NMAAHC

 

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Its new National Museum of African American History and Culture was under construction and it would not want to be seen buying while actively soliciting donations. It was time to have lunch with the "mystery" bidder's rep and the lawyer who wanted the collection for her alma mater, Lincoln College. These we determined were the two serious bidders. The lunch was an interesting chess match. Everyone’s bid was in the same ballpark. Therefore, our $1 million (which we hadn't yet raised) meant at least $2 million if pooled. The lawyer was interested, but when the "mystery" rep confirmed he represented the Smithsonian, we jumped and she demurred.

We had laid out several strong scenarios which centered around our officially working with the Smithsonian, but this was the summer before a Presidential election. Every official was out of town. Final bids and checks were due in early September and no one in Washington was in a hurry to make a decision to go forward. What to do? Without official sanction we could do nothing except bid against the Smithsonian or drop out. So, in the end, there was a simple choice to be made: the art of the collection would be preserved, protected and housed in the best possible place to be promoted for the future. We announced that we would back the "mystery" bid, thus making it appear that they would also get our money (in the hopes of frightening other bidders off). On the day proscribed for bidding on the Montague collection, only the "mystery" bidder entered the courtroom.

We thanked our potential donors. We had succeeded without spending any money.

Mission accomplished.

American Arts Trust

Art is the Answer


The Montague Collection ~ Additional Information