Titian deal late by legal and financial information

Fundraising for Titian’s Diana and Actaeon continues to be successful, but concluding the £50m cope with the Duke of Sutherland is becoming bogged over legal and financial questions. The initial deadline for the National Gallery of Scotland (NGS) and the National Gallery (NG) in London to sign a firm resolve for buy was 31 December. Both the Duke and the galleries are becoming increasingly frustrated by the delay.

The Art Newspaper can reveal that there have been two difficult issues to resolve. The first concerns assurances within the continued loan from the remaining 26 Bridgewater painting techniques which have hung in the NGS since 1945. They were once owned through the 3rd Duke of Bridgewater and now belong to the 7th Duke of Sutherland.

The Bridgewater pictures in the NGS represent the best private collection of old masters techniques on loan to some museum all over the world. Valued through the Art Newspaper at over £1bn, they include masterpieces by Raphael, Poussin and Rembrandt.

Providing the NGS and NG bought the two Titians (Diana and Actaeon and Diana and Callisto), it was expected how the Duke would guarantee that the rest would continue to be displayed in Edinburgh. It was reflected inside a joint statement he earned on 27 August 2008 using the NGS and NG, stating that “the remainder from the Bridgewater Collection will stay on long-term loan”. The two galleries stated that the period will be 21 years.

Two months later, inside a NG/NGS statement on 29 October, the wording had changed slightly: “we happen to be offered assurances which we hope [our emphasis] will secure the rest of the Bridgewater collection for the next 21 years.”

By now it was clear that the Duke wanted an escape clause, to permit further sales in case of exceptional circumstances. The galleries were concerned that this would negate the idea of a company assurance.

It also emerged that in 2003 the 7th Duke had given what have been interpreted at the time to become verbal assurances that he will make no further sales. This was once the NGS was purchasing Titian’s Venus Anadyomene, valued at £20m. However, there have been no written assurances on this occasion.

Following lengthy negotiations this winter, agreement has become close on the long-term loan from the remaining 26 pictures to the NGS. It's unlikely to be a binding guarantee, but is a strong assurance.
Another issue under discussion may be the second Titian, Diana and Callisto. Assuming Diana and Actaeon is successfully acquired, the second Titian will be offered to the NGS and NG in four years’ time, for “a similar amount” as the first one.

However, this future “option” might have tax implications, affecting the value of the deal towards the Duke. What this means is it has proved hard to finalize the structuring of payment arrangements for that second Titian. Without this agreement, the NGS and NG cannot proceed with the purchase of the first, since a package agreement must be finalized and signed.
Meanwhile the NG and NGS happen to be fundraising for that £50m needed for Diana and Actaeon. Only two grants happen to be announced: £1m from the Art Fund (14 October) and £10m from the National Heritage Memorial Fund (19 November).

The American Friends from the National Gallery, which administers the Getty Endowment, is expected to make a major contribution. Also may be the Scottish Government, that is awaiting the final agreement on purchase terms and loan assurances within the remaining Bridgewater collection; its grant may well be over £10m, possibly spread over a period. The Treasury in London seemed to be approached for a grant, with the Department for Culture, Media and Sport, but this is believed to happen to be refused. A number of major private donors are supporting the acquisition.

By 31 December, the NG and NGS needed to be in a position to commit these phones buying Diana and Actaeon, although payments could be spread over four years. Even though only £11m from the £50m had been announced, with private commitments they believed able to proceed. Considering the general economic recession, which intensified soon after the fundraising drive premiered, this represents a major achievement.
Subsequent legal and procedural delays have been very difficult for the NGS and NG, since many from the funders are just prepared to make an absolutely firm commitment once all the questions happen to be resolved.

Neither side would discuss the issues under discussion. Both galleries said they hoped to make an announcement shortly. The spokesperson for the Duke of Sutherland told The Art Newspaper: “The legal negotiations are very complex. Both sides are working hard towards an earlier conclusion.”