Paperwork in Terry Mansion lawsuit relate museum basis’s want to be rid of obligation

Documents in Terry Mansion lawsuit relate museum foundation's wish to be rid of obligation

Richard H. Mays, an lawyer within the lawsuit in opposition to town of Little Rock and the Arkansas Museum of Superb Arts and its Basis over the deterioration of the historic Terry Mansion has been amended so as to add details about cash raised to assist the power as an outlet for the humanities.

WARREN STEPHENS: He mentioned the museum basis desires to finish all assist of Terry Mansion on the finish of June.

It additionally outlines communications from financier Warren Stephens, chair of the muse board, of the museum’s need to scrub its arms of any obligations for the property and finish even minimal assist by July 1. Mayor Frank Scott Jr. was conscious of this, however family members weren’t knowledgeable of this, the amended grievance says.

The Arts Middle Basis has sought dismissal of the lawsuit for failure to sufficiently allege that donations to the muse had been for an endowment.

Mays’  amended grievance contains paperwork that point out donations to the home had been for an endowment.

Right here’s the amended lawsuit.

Homeowners of the house, Adolphine Fletcher Terry and her sister, Mary Fletcher Drennan,  deeded it to town in 1964 for the eventual use of what was then often called the Arkansas Arts Middle. The property transferred in 1977 and the Arts Middle finally started utilizing the constructing as a middle for ornamental arts and in addition leased it for particular occasions. The lawsuit says the Museum Board created an endowment for everlasting funding in 1984 and raised cash for upkeep and operations. The Winthrop Rockefeller Belief contributed $1 million as an identical grant for the endowment. A 1984 Arts Middle information launch introduced the grant for an “endowment, which is able to present working income.” The grievance additionally references mentions of an endowment in Rockefeller Belief communications concerning the grant. The Arts Middle basis then solicited contributions with a kind that mentioned, partially:

I pledge my assist to the Arkansas Arts Middle Basis within the quantity of $_________ to supply a everlasting endowment for the Ornamental Arts Museum.

The Arts Middle Basis, in searching for favorable tax remedy of contributions, wrote in a letter to the IRS:

The AACF [Arkansas Arts Center Foundation] needs to create an endowment fund the earnings from which might be used for the day by day operations of the Home, … and utilities and upkeep. The Trustees of the Winthrop Rockefeller Charitable Belief have authorised a two-for-one matching grant of endowment funds as much as $1,000,000.
Accordingly, a possible endowment fund of $1,500,000 could also be raised.

Though the AACF has gathered an endowment fund for functions of supporting the Arts Middle, that endowment can’t assist each the operations of the Arts Middle and the Home. Thus, to have the ability to perform the needs of the Home, an extra endowment fund is critical.

The amended grievance contains different communications by the Arts Middle together with a 1986-87 annual report that referred to the “endowment drive.”

It additionally features a 2003 letter from then-museum director Ellen Plummer that references the $1.8 million endowment for the home (separate from a bigger Rockefeller reward to the Arts Middle itself).

She wrote:

I do admire the purpose that this doc makes; that there’s a long-standing, deep dedication to the Arts Middle usually and the Terry Home specifically on the a part of the Rockefeller household, the Terry household and certainly the group as a complete. Our intent is to honor that heritage.

Mays argues that cash may very well be used just for home operations, not different Arts Middle functions. And he questions whether or not rental receipts for the power went to deal with upkeep, because the deed specified.  The ornamental arts middle was closed in 2003 and the property has deteriorated. Members of the family introduced the swimsuit to pressure town and humanities middle to ship on commitments to take care of the property. Town mentioned it’s joyful to take action if the humanities middle produces some cash.

Mays’ swimsuit says:

The Basis obtained the Endowment funds as a fiduciary trustee, and as such was and is accountable for the prudent funding, administration and use of the funds for his or her meant functions. Below relevant regulation and accounting ideas referring to expenditure of Endowment funds, and in view of donations of cash and companies to the Pike-Fletcher-Terry Property from sources aside from the Endowment (e.g., donations by the State of Arkansas, the Metropolis of Little Rock, and different sources), the Endowment for the Property must be in existence with a big stability. The Arkansas Arts Middle/Museum Basis must be required to account for the funding, expenditure, and use of the Endowment funds.

The humanities middle desires to scrub its arms of the property. Mays’ submitting says:

On June 24, 2021, representatives of the Terry-Drennan Household met with representatives of the Museum and the Basis relating to the longer term use of the Property by the Museum. They had been advised by Mr. Warren Stephens, Chairman of the Basis’s Board of Administrators, that he had, a number of months earlier, directed the Basis’s lawyer to draft a letter to the Metropolis of Little Rock stating that the Basis not had an curiosity within the Property, and would relinquish it. On the request of the Mayor of the Metropolis of Little Rock, who acknowledged that verbal discover was enough, the letter was not despatched. That info had not theretofore been conveyed to any individual in or representing the Terry-Drennan Household.


Mr. Stephens additional confirmed to the representatives of the Terry-Drennan Household that the Basis wouldn’t make investments any more cash into the Property, aside from cost of utilities on the home till June 30, 2022, the top of the Basis’s fiscal 12 months.


As a substitute, Mr. Stephens acknowledged that the Basis Board has a fiduciary obligation to protect the funds raised within the capital marketing campaign during which the Basis is at present engaged, ignoring the truth that The Basis additionally has a fiduciary obligation to protect the Endowment Fund that was raised for the Pike-Fletcher-Terry Property.


Stephens’ reported statements appear considerably at variance with a defensive assertion issued lately by the muse which mentioned: “As a corporation, the [museum] stays dedicated to working with the Metropolis to hunt a optimistic final result for the preservation of the Terry Home.”

The lawsuit complains the museum and basis, at any time after discontinuing use of the property, might have restored it at a decrease value and knowledgeable town and plaintiffs that it had no plans for the home. As a substitute, the museum and basis retained management of the property with out utilizing it or correctly sustaining it.

The swimsuit says heirs of the households had repeatedly inquired concerning the museum’s intentions.

The Heirs all the time obtained assurances that the Museum and the Basis thought-about the Property to be necessary and helpful to the Museum and the Basis.

It was not till June 25, 2021, that representatives of the Museum and/or the Basis suggested heirs of Adolphine Fletcher Terry and Mary Fletcher Drennan that the Museum and Basis had no additional curiosity in or use for the Property, and wouldn’t make investments any cash in sustaining the Property.

The lawsuit is pending earlier than Choose Alice Grey. An accounting of spending of the cash contributed to the home appears the minimal obligation owed by a recipient of hundreds of thousands in public tax cash and charitable contributions. Staffing of the home could have eaten up the cash and assist may not have been enough to maintain the guarantees made in accepting accountability for the home and taking cash for it. In that case, let the proof be proven.

Supply on guarantees by a charitable establishment may affect future items. On this case, the group searching for to stop the Terry Mansion venture, the museum and its basis, is amid fund-raising for rebuilding and enlargement of the core museum helped by tens of hundreds of thousands in public tax {dollars}.

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