Sudbury's art gallery reaches deal to save collection from LU insolvency process

The Art Gallery of Sudbury can continue to operate out of the Bell Mansion until 2025, under the terms of an agreement reached with Laurentian University.

Laurentian has also agreed not to sell the art to help settle its debts as it works its way through insolvency under the Companies' Creditors Arrangement Act.

After that process is completed, LU has agreed to give the AGS 90 days notice if it intends to sell the collection.

The future of the AGS was in question after its assets were included in Laurentian University's insolvency declaration. Lawyers for the gallery went to court seeking to remove $6.39 million in assets from the process.

They include the Bell Mansion (valued at $1.3 million), the art collection (valued at $4.8 million), as well as funds held in trust (about $216,000) and the library ($20,000).

However, the monitor of the insolvency process, Ernst & Young, argued the assets belong to LU and it would be unfair to creditors to remove them from the process.

The fate of AGS assets is of particular importance, since Greater Sudbury is planning to spend roughly $50 million building a new art gallery and library in downtown Sudbury, a project known as Junction East.

Under the terms of an agreement dated June 17, the AGS can stay at the Bell Mansion until the new art gallery is completed, or May 30, 2025, whichever comes first.

"LU will be free to sell the Bell Mansion provided that any closing date for such sale is not prior to the vacate date, and the AGS undertakes not to take any steps to impede or contest the sale," the court documents said.

"AGS will agree as part of the settlement that it does not own the art and, for all purposes, that it does not own or does not have any property interest or similar type of interest in the art collection and the BA McDonald Funds."

The gallery will continue to be responsible for and pay the costs of maintenance at the Bell Mansion, while LU will not charge it rent prior to the vacate date in 2025.

In a statement, LU president Dr. Robert Haché said he welcomes the agreement.

"We are proud of the Laurentian University art collection, and we are grateful custodians of artwork that has been donated to the university and purchased by the university over the past 60 years," the statement said.

"We have recently resolved the dispute raised by the Art Gallery of Sudbury which includes an acknowledgment that the art collection is not owned by, or the property of the Art Gallery. As part of that settlement, Laurentian has agreed that the art gallery is permitted to continue to occupy the Bell Mansion on the existing terms until no later than May 2025."

Read the full setlement here.