A trustee in the St. Gregory's University federal bankruptcy case has denied a claim filed by a Shawnee art museum.
The Mabee-Gerrer Museum of Art claims it is owed about $2.3 million from the sale of mineral interests, which was held in July. A hearing on trustee John Mashburn's denial of the claim is scheduled for March 20 in the U.S. Bankruptcy Court for the Western District of Oklahoma. St. Gregory's University closed and filed for Chapter 7 bankruptcy in December 2017.
The museum's connection to the university through the mineral interests dates back to 1998, when the W.P. Wood Charitable Trust transferred ownership in its mineral interest to three parties: St. Gregory's University, Oklahoma Baptist University, and the Shawnee Regional Hospital Foundation.
Before the Wood mineral deed was finalized, the Wood Trust's trustee sent a letter to the university stating that a percentage of the university's mineral interest earnings should go to the museum. In his objection, Mashburn said the letter was never recorded in the chain of title to the mineral interests or otherwise.
For the museum, the 30 percent share of mineral interest earnings it received from the university represents about 20 percent of its budget, said Museum Director Dane Pollei. The museum operates on about $500,000 annually.
Before 1990, the museum was effectively a department of the university. That year, it became its own 501(c)3 nonprofit organization. About 40,000 people visit the museum each year, including 18,000 students.
Mashburn said the Wood mineral deed does not contain any language about transferring the money to the museum.
"Even if enforceable by the museum, the Wood Trust Letter and the board's resolution clearly reference only the sharing of a percentage of the (university's) earnings each year or revenue received from the mineral interests," he said.
He said the Wood Trust clearly knew how to transfer the dividend interest, so if it wanted to do that properly to the museum, then it would have been done.
Mashburn said even if the museum had claim to the interests, he, as the trustee, still had the right to the earnings because the mineral interests were conveyed to St. Gregory's. He was tasked with liquidating the university's assets to pay off debtors.
To date, more than 100 proofs of claim have been filed against St. Gregory's, totaling in excess of $10.6 million.
This story has been corrected to show that Dane Pollei is the director of the Mabee Gerrer Musuem of Art. He was initially listed as former director.