Debt Paydown bodes well for the de Young's Jolika Collection

We've been following the story of the Oceanic Art Collection that is involved in a family inheritance dispute. This week the San Francisco Chronicle reported that the battle for Oceanic Art will be fought in San Francisco. The Museum’s ability to hold and keep the entire 4000-piece collection is under threat by a dispute that ensued when de Young Trustee John Friede, promised his prized collection to the de Young Memorial Museum but at the same time put it up as collateral in a legal settlement over his mother, Evelyn A.J. Hall's, estate with his two brothers (Evelyn Hall was Walter Annenberg's sister. She was an avid art collector and philanthropist).

His brothers, Thomas Jaffe and Robert Friede, claim the right to the artwork because John Friede owes them a $30,000,000 settlement from an inheritance dispute in Florida. Separately, Sotheby's sued John Friede in New York over $25 million it was owed, and a judge there has ruled that the auction house can take 54 works.

The museum in reliance on the gift, designed and built a major 8000-square-foot gallery to house the collection and under a 2007 Promised Gift and Deed of Gift Agreement the Friedes expressly agreed to keep the works free and clear from any "liens, claims and encumbrances of any kind unless the Friedes obtain prior written approval from the Fine Arts Museums."

The only exception is for works already pledged to secure a loan under a preexisting agreement with Sotheby's, according to a complaint filed by the City on September 17, 2008.San Francisco City Attorney Dennis Herrera sued the brother in an attempt to protect the collection from being dismantled. A San Francisco Superior Court ordered that the art work will stay where it is for the time being.

According to the article, Freide has been paid down his $24 million of debt to his brothers and now owes them only $6 mil, so the city is hoping that there's a chance the case can be resolved without going to court.

For more about the collection check out this interview with John Friede at Tribalmania.com and the de Young web page on the Jolika Collection.