NASHVILLE, Tenn. — A judge on Friday dismissed Fisk University's $30 million proposal to share an art collection with an Arkansas museum founded by a Wal-Mart heiress and will again consider arguments from Santa Fe's Georgia O'Keeffe Museum, which wants the collection.

Chancellor Ellen Hobbs Lyle said she came to her conclusion "with great reluctance" because of the importance of the cash-strapped historically black university. But Lyle said in her ruling that "Fisk must find another alternative to its financial crisis" because the deal is not in keeping with the wishes of O'Keeffe, who donated the 101-piece collection to Fisk in 1949.

The art-sharing proposal would have seen the collection travel between Nashville and the Crystal Bridges Museum of American Art in Bentonville, Ark., which was founded by Wal-Mart heiress Alice Walton.

A Feb. 19 trial originally intended to evaluate the Crystal Bridges deal now will focus on whether the entire collection should revert to the O'Keeffe Museum, which is the legal representative of the artist's estate. When Fisk first sought court permission to sell pieces from the collection to raise money, the museum argued instead that O'Keeffe's gift to the university included the condition the collection be kept on display and not be sold. Fisk had put the art into storage in 2005 because the gallery where it was exhibited was falling apart, and there were fears the works could be damaged.

The museum and Fisk eventually reached a settlement that would have let the school sell a major work by American modernist Marsden Hartley in return for transferring one of O'Keeffe's own paintings in the collection, the 1927 Radiator Building — Night, New York, which is considered one of her masterpieces, to the Santa Fe museum for $7.5 million.

But that settlement was rejected by a Tennessee court. Fisk then sought approval of the Crystal Bridges proposal for a joint ownership agreement that would let the two institutions display the collection on an equal basis. The art had belonged to O'Keeffe's husband, photographer Alfred Stieglitz, and includes — in addition to Radiator Building — Night, New York, which is valued at $20 million or more — works by Picasso, Renoir, Cézanne, Hartley, Alfred Maurer and Charles Demuth.

After the Radiator Building agreement was rejected, the O'Keeffe Museum's board chairman, Saul Cohen, said if there were no settlement, "we would take the position that the conditions of her gift were not met." The traditional remedy in that situation, he said, is "the gift reverts, and the collection comes back to us."

Cohen said the Santa Fe museum had been willing to forego that result by waiving its objection to the sale of the Hartley in return for Radiator Building. He estimated the Hartley would bring Fisk $15 million to $20 million at auction, which, combined with the $7.5 million the museum would give the university for the O'Keeffe, makes a total "close to Mrs. Walton's offer" of $30 million.

O'Keeffe donated the art to Fisk because the school, founded in 1866, educated blacks at a time when the South was segregated.

"The donation to an African-American university made a public statement and gesture to heighten the consciousness of a segregated society that African-Americans and their institutions ranked equally, among and as a vital part of American society and the cultural arts," Lyle wrote in her ruling.

She noted that in donations of art to two other institutions, O'Keeffe gave them the right to sell those pieces after 25 years. "This right was not given to Fisk," she wrote. "She had no personal connection to Fisk from which one could conclude that she had an intent to have the collection used to keep Fisk in operation."

Messages seeking comment left Friday with O'Keeffe Museum spokespeople, including Cohen, and with the Arkansas museum's public relations firm were not returned.

Fisk University spokesman Ken West said the school will continue to focus on other ways to generate money. "While it's obviously not the outcome we fought for," he said, "it does not diminish our fundraising efforts. ... We will defend vigorously against the O'Keeffe Museum's effort to take this collection away from Fisk. They'll have the fight of their lives."

West said the university is considering its legal strategy for the coming trial. "We'll obviously have to amend that strategy, and we're currently amending our options for appeal," he said.

Lyle refused this week to delay the trial to consider a proposal to display the collection at a Nashville museum of black culture that is not expected to open until at least 2011.




© Copyright Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.