NEWS///INSTITUTIONALIZED///BRANDEIS UNIVERSITY FORCED TO CLOSE ROSE ART MUSEUM AND SELL COLLECTION FOLLOWING MADOFF PONZI SCHEME LOSSES
The most breathtaking aspect of Bernie Madoff’s massive Ponzi scheme collapse is undoubtedly the sheer breadth of the types of people and institutions affected. Now its impact is being felt in the art world as Boston’s BRANDEIS UNIVERSITY has announced it will be forced to close its progressive ROSE ART MUSEUM and liquidate its prestigious collection of modern art after numerous major donors and trustees lost big when Bernie went down. Faced with an estimated $79 million deficit, the decision to close up shop and go the Circuit City route has the art world—and a legion of Rose Museum donors—up in arms:
For the trustees at Brandeis University, the easy part is over. Without an apparent word of dissent, all 50 or so trustees approved a plan on Jan. 26 to close the university's 48-year-old Rose Art Museum and sell its entire 7,180-piece art collection, which was last appraised in 2006 at about $350 million.
Brandeis's endowment had plunged to $540 million at the end of 2008 from $712 million as of June 30 of that year, and it was earning significantly less than the 8%-plus annual return on investment it had posted on June 30. Some of Brandeis's trustees are believed to have lost money from Bernard Madoff's Ponzi scheme, limiting their ability to make up the difference. The school, which by law spends only its gains and not the principal of the endowment, reduced expenditures by $10 million and instituted various budget-freezing measures, but "we couldn't do any more belt-tightening without fundamentally changing the character of the university," said Peter French, Brandeis's chief operating officer and executive vice president. He noted that, as the trustees looked ahead at the next four or five years, they could see operating deficits of $10 million to $20 million a year and little likelihood of Brandeis regaining its $700 million endowment and 8% interest income until 2015. The art collection looked like a big source of potential revenue.
Now comes the hard part. The decision was heavily publicized and met with condemnation by museum and educational associations, as well as by individuals throughout the art world. OK, trustees and officials at Brandeis can ride that out; there's always some catastrophe somewhere else to divert people's attention. But current and future donors to Brandeis may hold a grudge a little longer, if they believe that objects donated to the university will be quickly turned into cash. Click HERE to continue reading...
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