The Corcoran Gallery of Art will receive $10 million in cash and play a role in a new national arts foundation under a final settlement signed Tuesday in the titanic legal battle over the $300 million estate of copper heiress Huguette Clark.
The Corcoran also will collect half the proceeds in excess of $25 million from the sale of Claude Monet’s “Water Lilies,” a painting not seen in public since Clark bought it from a gallery in Paris in 1930, when she was 23. And the Corcoran could claim 25 percent of any money recovered from the recipients of millions of dollars in gifts given by Clark late in life. A public estate administrator in New York has alleged that those gifts may have been the result of undue influence exercised upon a recluse who lived to be 104.
The Corcoran will gain a seat on the board of directors of the Bellosguardo Foundation, a new institution whose principal asset is Clark’s $85 million seaside mansion of that name in Santa Barbara, Calif. Corcoran officials said that the gallery could collaborate with the foundation by lending paintings and expertise, and the foundation might one day make grants to the gallery.
The settlement puts a period on what is, in many ways, a sad but classic multigenerational American saga of great deeds and wealth, of eccentricity and charity, ending in a free-for-all to divide up the spoils of a 19th-century fortune.
“There just don’t seem to be people like Huguette around anymore,” said Peggy Loar, interim director and president of the Corcoran. “The doyennes are pretty much gone.”
Clark, who died in May 2011, and her father, copper baron and U.S. Sen. William Clark, were major benefactors of the Corcoran. The father, a billionaire in today’s dollars, left hundreds of artworks to the gallery when he died in 1925, and Huguette, the only surviving child of his second marriage, helped pay for a huge expansion of the gallery building near the White House in the late 1920s. She gave millions more to the Corcoran over the decades.
Huguette Clark had no children. Her brief marriage to the son of an employee of her father’s ended in 1930. She was a painter and a reluctant social celebrity of the Jazz Age who was close to her mother, her father’s much younger second wife. Huguette began withdrawing from society after her mother’s death in the early 1960s. She accumulated a world-class collection of art dolls and spent the last 20 years of her life in Beth Israel Hospital in New York — paying as much as $400,000 a year — despite being reasonably healthy for much of the time and owning mansions on both coasts and three luxury apartments in New York. From the hospital, she wrote checks for millions of dollars in gifts to her nurse, her doctors and others.
In 2005, she signed two wills within a six-week span. The second will cut out her distant relatives. The lawyer who drafted it was one beneficiary, and so was her nurse. The will also called for the creation of the Bellosguardo Foundation, and the Corcoran was to get “Water Lilies,” valued at $25 million. But the gallery joined the family in contesting the will. Sixteen law firms jumped into the fray.
A fortune of $300 million melts quickly. The biggest single cash allocation under the settlement is $34.5 million to 20 descendants of William Clark’s first marriage. Most had never met Huguette or had not seen her in decades.
The family members said in a statement that “the settlement sends a strong message that those entrusted with the care of the elderly will be held accountable for their actions.” They added: “We also appreciate the Corcoran’s firm stance in this matter, and that it is receiving a substantial bequest from Aunt Huguette.”
The second-largest allocation is to lawyers. Law firms representing the family and Clark’s lawyer, Wallace Bock, will receive $11.5 million each. The firm representing her private nurse, Hadassah Peri, will receive $1.5 million.
Peri will have to pay back $5 million of the $31 million in gifts that she and her family received from Clark over 20 years. In exchange, Peri will be exempted from separate legal proceedings to recover past gifts.
Clark’s goddaughter and longtime employees will receive more than $4 million.
The only two charitable beneficiaries — the Corcoran and Bellosguardo — made out relatively well. Counting the value of the mansion, most of the estate’s assets are going to them. Bellosguardo also will receive Clark’s doll collection, valued at more than $1 million, and $4.5 million in cash.
There is some doubt that there will be enough money to go around because the estate could also be liable for millions of dollars in unpaid back taxes, interest and penalties, plus estate taxes, according to lawyers in the case. Clark’s private art collection — including paintings by Renoir and John Singer Sargent now on exhibit at the Corcoran — will be sold to help fund the settlement.
Controversy has flared over the foundation. A separate entity by the same name was incorporated in 2011 in California and had the support of Santa Barbara community leaders, but last week it was cut out of the case. Some feared that the mansion would be sold to pay taxes and lawyers’ fees, but Santa Barbara officials said Tuesday the final settlement allayed their concerns.
“This settlement gives our Santa Barbara community an amazing opportunity to create a magnificent organization that will significantly add to our strong artistic and cultural heritage,” Mayor Helene Schneider said in a statement.
The foundation’s directors will include seven picked by the mayor and one each by the Corcoran, the Clark descendants and Clark’s longtime Santa Barbara attorney, James Hurley Jr.
New York Attorney General Eric T. Schneiderman’s charities bureau helped drive settlement talks. The settlement “will ensure that Huguette Clark’s charitable wishes are fulfilled, allowing the bulk of Mrs. Clark’s wealth to go to charity instead of being wasted on legal costs,” said Melissa Grace, a spokeswoman for Schneiderman.
The settlement calls for the foundation to make grants to arts groups in New York and California, and to ones Clark supported during her lifetime — a nod to the Corcoran without mentioning its name.
“It fits so neatly with Mr. [William] Corcoran’s vision of fostering ‘American genius,’ to be part of this new entity that will support arts in America,” said Charles Patrizia, a partner with the firm of Paul Hastings, representing the Corcoran at no charge.
The Corcoran’s tactic of joining the family in objecting to a will that would have provided a gift worth $25 million surprised other parties in the case, with one calling it a “strange position.”
“It’s a strange position if you come to this with the cynical New York view, which is, ‘Take the donation, smile and be happy,’ ” Patrizia said. “That is not who the Corcoran is. We . . . respect and look to the true wishes of our donors.”
There was evidence to suggest that Clark might not have understood the wills she signed in 2005, “after 15 years of being surrounded only by those who exploited her,” the Corcoran’s lawyers argued in a brief.
Nevertheless, in 2009, the Corcoran accepted a pledge of $1 million from Clark transmitted by Bock, whose actions caused the Corcoran later to challenge the will. Yet, at the time of the pledge, the Corcoran did not know Clark’s full circumstances, Patrizia said. Once gallery executives found out, they did not pursue the unpaid pledge balance of $500,000.
In the end, Corcoran officials now say they feel more confident that Clark really did wish to include the gallery in her will, based on information that emerged in the estate case. Patrizia cited evidence that she specifically instructed her accountant to designate “Water Lilies” for donation to the Corcoran.
“We’re going to be very guarded with these funds,” Loar said, referring to the $10 million in cash. “This will help our operating situation, but very carefully.”
The Corcoran needs the money. With annual deficits running about $7 million on a $31 million budget, the gallery stunned Washington in 2012 when it considered selling its landmark building on 17th Street NW. To raise money, the gallery sold an adjacent parcel to an office developer for $20.5 million.
The gallery and the related Corcoran College of Art and Design are exploring a partnership with the University of Maryland. Results of those talks could be announced in the coming weeks, Loar said.