In the ongoing battle over Fisk University’s Alfred Stieglitz Collection, the university last week suffered a stunning, if not entirely unexpected, legal defeat. Davidson County Chancellor Ellen Hobbs Lyle ruled that Fisk may not sell any of the artworks in the collection. Lyle did, however, suggest a path out of the legal morass, but whether the university heeds it remains to be seen.

Fisk has spent the past year-and-a-half paying attorney fees it can ill afford, seeking from the state attorney general and Davidson County Chancery Court the legal right to sell two stars of its Stieglitz Collection: Georgia O’Keeffe’s “Radiator Building—Night, New York” and Marsden Hartley’s “Painting No. 3.” O’Keeffe assigned both paintings—along with 99 other works—to Fisk in 1949, when she was settling the estate of her late husband, the famed photographer and collector Alfred Stieglitz. The university wants to sell them to pull itself out of financial free fall.

The Georgia O’Keeffe Museum in Santa Fe, which represents the interests of O’Keeffe’s estate, challenged the university’s freedom to sell, citing, in particular, correspondence between O’Keeffe and then-Fisk president Charles S. Johnson. In the letters, O’Keeffe specifies that the collection “will be exhibited intact” and that the university “will not at any time sell or exchange any of the objects in the Stieglitz Collection,” conditions to which Johnson readily agreed.

Lyle went down the line with the museum. She ruled that Fisk’s “aggressive plan to treat the individual artworks of the Collection as commodities to generate revenue, especially the plan to sell Radiator Building, the signature piece of the Collection, is antithetical to and in disregard of the special identity and effect of the display of the Collection as a whole for the public to study modern art at Fisk.”

In its petition to sell, Fisk acknowledges that O’Keeffe imposed these conditions. But the university claims that obeying them places a heavy financial burden, in the form of gallery staff, security, environmental controls and conservation. Financial stability for the university comes first, Fisk argues.

Museums often deaccession art, but in standard curatorial practice the revenue goes back to the collection. There’s also precedent for modifying conditions attached to a gift that are impossible or impractical to comply with because of changing circumstances. The Barnes Collection will move to Philadelphia from a suburb despite the stipulation by donor Albert Barnes that the artworks must “remain in exactly the places they are” in the museum he built. In recent years, the Barnes Foundation has struggled financially and the suburb has tightened restrictions on the number of visitors. So the court determined that the collection could move—cushioned by $150 million from Philadelphia foundations—to advance Barnes’ primary purpose to teach working-class people and African Americans to appreciate and understand art.

Fisk’s stated intention, however, is to use the bulk of the tens of millions the two paintings could bring for purposes other than its art collection: to replenish its endowment, establish chairs in business, math and science, and provide seed money for a new science building. Only $570,000 would go to renovate the Van Vechten Gallery, where the collection was displayed before being placed in storage.

This issue of whether the modification of conditions attached to a gift ultimately advances the purpose for which the gift was made lies at the heart of Lyle’s ruling. In her decision she writes that “the purpose of the donation of the art”—as expressed in Stieglitz’s will and subsequent statements by O’Keeffe—“was educational: to provide the public access to the Collection to promote the study of art.” Lyle points out the “absence from these sources [of] any reference that Ms. O’Keeffe or her husband sought to help the University financially or assure the accomplishment of its mission.”

Lyle also states that “the only conclusion a reasonable person can reach is that it is the Collection as a whole, not the individual artworks, which accomplishes the educational purpose specified at the time of the donation and that the donation was not given to Fisk to use as a source of revenue.” Thus the sale of any objects in the collection would not enhance O’Keeffe’s purpose but undermine it.

Fisk now finds itself in a legal straitjacket. The university can’t sell the paintings and is still facing a July trial—more legal bills—to answer the claim made by the museum that the school has violated the conditions of O’Keeffe’s gift, in particular to exhibit the collection intact. The collection has been in storage at the Frist Center since 2005, when the university determined that its gallery didn’t provide proper security or environmental controls. While the remedy the museum seeks is unspecified in the legal documents, the threat of reversion of the collection back to the museum, as the successor to O’Keeffe’s estate, looms. Fisk could lose the art and literally be the poorer for it. And if the university retains the collection, the museum will ask the court to insist that Fisk comply with O’Keeffe’s conditions for its exhibition and maintenance, conditions the school already has claimed are burdensome. If the university doesn’t comply, the museum could drag Fisk back to court again.

In her decision, Lyle suggests a way out. “Perhaps if the University had pled specific facts of hardship…such as the University’s financial condition renders it impracticable to continue to maintain the Collection at the University, and instead of trying to generate revenue from the artworks had tailored the relief to locating a proper facility in Nashville which would bear the exhibition and display costs, make the Collection available frequently and free of charge to Fisk students for the study of art, neither break up nor sell the Collection, duplicate the display insisted upon by Ms. O’Keeffe and retain the name of the Collection as the Alfred Stieglitz Collection at Fisk University, the Court could, as a matter of law, have considered such use as being close to and in furtherance of the intent and purpose of the donation….”

Such a scenario was the subject of a series of brainstorming sessions in March in which Tennessee Attorney General Bob Cooper participated along with members of Fisk’s legal team, bankers, representatives of the Frist Foundation and the board of the Frist Center. The game plan included a capital campaign to help stabilize Fisk, but it never evolved beyond the talking stage.

The alternatives the university faces are an appeal to the Tennessee Court of Appeals, but that means gambling yet more legal fees against the possibility of another defeat. Or university officials could reach some settlement with the museum.

They’ve been down this road before. Last year, the university and museum agreed that the museum would pay $7 million for “Radiator” and not oppose the sale of the Hartley. But Cooper rejected the settlement when outside offers for “Radiator” were three times that much. Cooper reasoned that selling the painting for “a bargain basement price” was not in the best interests of either Fisk or the Tennesseans who are the ultimate beneficiaries of O’Keeffe’s gift.

Fisk officials have declined repeatedly to comment to the Scene on what course the university will pursue until after its board meets this week. The museum’s board president, Saul Cohen, says, “We’re always willing to talk” about a settlement. “But any proposal will have to come from Fisk. The opinion of the court provides no benefits for Fisk. The settlement was mutually beneficial.” Any new agreement, however, would have to be approved by the court and could be challenged by the attorney general.

The museum’s previous offer makes clear that it wants “Radiator” and is willing to break up the Stieglitz Collection to get it. This is understandable for an institution devoted to the celebration of O’Keeffe’s artistic vision. Yet the museum has successfully argued for the legal necessity to respect O’Keeffe’s vision for the Stieglitz Collection. She personally assembled the collection and stipulated that it be exhibited intact so that Fisk students, and anyone else who walked through the gallery door, could see modern art as Stieglitz did.

Cohen describes this inconsistency as “superficial. If Georgia O’Keeffe were alive today she’d have the power to waive conditions. And we believe that she’d have liked to have her painting in her museum, which didn’t exist when she made the gift.”