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Art Loss Register

Christo Coetzee :  Blue Stretch Denney Collection

Lessons from the Denney Collection : 5 The Donation of paintings to Toulouse Why was there a need to "move as quickly as possible"?

Salvatierra de los Barros from the Castle

The pre-emptive removal of the pictures from Dallas, if brought to its conclusion as a donation to Toulouse, would have the effect of giving away 90% of the assets for a 10% return (28) and would have avoided the widow paying any tax on the estate. But what was the advantage in doing this? The puzzle remains unsolved.

Secrecy was necessary on two grounds: firstly, to keep the matter from the Spanish Tax authorities, for, we have already seen, the widow’s claim to title over the pictures was questionable because they had not been declared in Spain; secondly, to preserve a fiction before Denney’s children, who had a potential for claiming a share, that he had died leaving a very small estate. On both counts it would be best that no questions were asked until after the act of donation, when any flaws in the transmission of title could be more easily camouflaged.

Speed was also necessary to avoid news leaking out in advance of the signing of the Act of Donation:

• Supposing the heirs found out before the donation took place. A court case in Spain claiming a share "where the works are neither known or declared" might throw the whole project off the rails for good because the widow would have to defend her claim to be unique and sole legatee in Spain and extend the claim to the pictures, or she would have no title to pass on to MOMAT. But that would (a) expose her to tax on the undeclared assets and (b) advertise the fact that she had no title to pass on anyway! With the defective title public knowledge, would MOMAT get cold feet and call off the project? Or would MOMAT hang onto the pictures and deal with whoever proved to be the eventual owner? Either way, the widow might find herself at a considerable disadvantage, or even left out in the cold.

• Supposing that the heirs found out after the Act of Donation, the widow could disclaim title, since MOMAT would now be the apparent title holder. As far as the tax was concerned, since she had never declared the pictures, title had never passed to her: therefore no tax was due. To claim a share in the pictures the heirs would first have to prove themselves heirs in Spain and then prove that MOMAT’s title was defective in the French Courts. The two processes, one following the other, would be expensive and time consuming and the advantage would clearly be with the widow and the City of Toulouse for a long time.