art world

The school will liquidate its assets to pay creditors, but the fate of its famous Diego Rivera fresco remains unknown.

• Taylor Dafoe

• April 27, 2023

Art Institute San Francisco. Courtesy of Getty Images.

The San Francisco Art Institute (SFAI), saddled with outstanding debt, has filed for Chapter 7 bankruptcy. The move will require the 151-year-old school to liquidate its remaining assets to pay creditors.

The submission marks what may be the final chapter in what was once an important institution declining operation in recent years finally closed its doors last July. However, one important question remains to be answered: What will happen to SFAI’s famous 1931 Diego Rivera fresco?

According to a report by Chronicle of San Francisco, The art school owes more than $10 million to various creditors. First up is the University of San Francisco, which is said to have owed more than $6 million after breaking up a deal to acquire SFAI last summer

The regents of the University of California and the Fort Mason Center for Arts and Culture, owners of SFAI’s two separate campuses, say they are owed $450,000 and $750,000 in unpaid rent, respectively. Also on the list of creditors are the many former faculty members who lost their jobs and are now owed severance pay.

Regarding her assets, SFAI reported in the filing that she owns a painting by noted Mission School artist Alicia McCarthy valued at US$125,000 and office equipment and art supplies valued at US$50,000. The real treasure of the school is the Rivera mural, estimated to be worth up to $50 million. However, it remains unclear whether the institution can sell the artwork to pay off its debt.

Diego Rivera’s mural at the San Francisco Art Institute. Courtesy of the San Francisco Art Institute.

In late 2020, SFAI’s board of directors voted to explore “avenues and offers for endowment or sale” of the fresco to save the school, and Star Wars creator George Lucas was even said to have been interested in acquiring it. But the move promptly met with backlash from students, alumni and community members. Photographer Catherine Opie, who graduated from SFAI in 1985, called the potential sale an “incredibly unscrupulous decision.” Open letter to the school administration.

The mural was later declared a San Francisco landmark. Therefore, it may not be relocated without the approval of the city council.

Supervisor Aaron Peskin, who sponsored the landmark legislation, said so timeline that he wishes to transfer the piece to a public gallery or museum.

SFAI’s legacy rivals that of any art school in North America. His list of Alumni and former faculty members reads as in the 20th century art history phone book with names like Ansel Adams, Annie Leibovitz, Mark Rothko and Kehinde Wiley. But for many, the school’s earlier heights made its steep — and messy — decline that much more painful.

In March 2020, following the mass closures of the COVID-19 pandemic, SFAI announced that it would suspend its degree programs, halt student enrollment, and close indefinitely. Weeks later, the institution’s board voted to keep the school open on a limited basis and launched a “campaign to refocus and reinvent the school’s business model.”

By July, the prospects seemed even brighter than that The school received over $4 million in donations. The board promised to resume its courses in the fall and invited students to re-enroll.

But the wave of support proved too little, too late. SFAI officially ceased operations in July 2022.

“The reality is that tuition-based schools of this size are a vanishing species,” said Gordon Knox, a former SFAI president timeline. “And there is no changing evolution.”

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The post The San Francisco Artwork Institute, Which Educated Artists From Ansel Adams to Kehinde Wiley, Has Filed for Chapter appeared first on DAILY SAN FRANCISCO BAY NEWS.

The ailing San Francisco Art Institute (SFAI) has filed for bankruptcy, the San Francisco Chronicle first reported. The school, whose campus features an iconic and site-specific mural by Diego Rivera from 1931, had struggled for years financially before making its 2020 decision to support the current student body by starting and discontinuing admissions and degree programs. SFAI administration and board members made several attempts to save the school through fundraising, seeking partnerships, and even selling the Rivera mural.

SFAI filed for Chapter 7 bankruptcy protection on April 19. In order to pay off its hundreds to millions of dollars in debt, the school is required to liquidate all of its assets. Its creditors include SFAI’s landlords; a pest control company; AT&T; the University of San Francisco; and each fired faculty member who is owed severance pay.

Inside and outside the institution, some blame the school’s failure on declining enrollment, prohibitively high tuition and board mismanagement of finances, as well as an extravagant, $14 million debt-incurring expansion to a satellite campus at Pier 2 on the San Francisco Bay Area Year 2017. The satellite campus closed in mid-2020 amid the pandemic and began looking for subtenants to take on the remaining 50 years of the lease.

In 2020, SFAI raised approximately $4 million in funding to stay afloat and serve its tenured faculty and remaining student body through inception, and leaders were excited to find other funding and partnership opportunities to protect the school’s heritage. The University of California Board of Regents stepped in and paid off SFAI’s debt, effectively becoming the institution’s new landlord and thwarting its foreclosure. As 2021 begins, the school is once again keen to pay off its multi-million dollar debt and explored an opportunity to sell Diego Rivera’s The Making of a Fresco, Showing the Building of a City (1931), which was last appraised at $50 million, only to meet fierce backlash from the school’s union workers as well as San Francisco residents, many of whom were pushing for the city to recognize the mural as a landmark.

In a last-ditch effort to persevere, SFAI considered a partnership with the University of San Francisco that was intended to be solidified in early 2022, but ultimately fell through, leading to the school’s decision to officially close for good on July 15 of this year – itself as non-profit organization to protect its name, history and archives. “After years of planning and the immeasurable sacrifices of our students, faculty and staff, it is deeply unfortunate that we are now faced with this present outcome,” then-Chairman and photography alum Lonnie Graham said in the school’s official statement on the move’s permanent closure .

The San Francisco Chronicle reported that Rivera’s mural would stay for now and could later end up in a public gallery. SFAI has not yet responded to Hyperallergic’s request for comment.

The post San Francisco Artwork Institute Information for Chapter appeared first on DAILY SAN FRANCISCO BAY NEWS.

Moving concierge startup Kandela has filed for bankruptcy after losing a legal battle porch groupthe company that bought it in 2019, The only true have learned.

Beverly Hills-based Kandela, which arranged for the installation of services like internet and cable television for people moving into new homes, attributed its bankruptcy to a $1.4 million prize that Porch won in an arbitration had.

Porch acquired Kandela in 2019 in an all-stock deal valued at $11.5 million. More than 100 Kandela employees were retained after the Porch acquisition.

Kandela sued in 2020, claiming that its new parent company was involved in a “stunning and systematic fraud scheme,” according to court documents. The dispute revolved around $6 million in earnouts that Kandela was entitled to for meeting profit and revenue targets. At the time, Kandela said Porch was “intent” on making sure it didn’t get the earnouts.

“Kandela discovered several material misrepresentations by Porch that demonstrated the impossibility of meeting the milestones envisaged by the Earnouts,” Kandela’s new bankruptcy filing reads.

In response to the lawsuit, Porch CEO Matt Ehrlichman said that Kandela “oversold” its ability to meet the targets, previous reports show.

Porch won in arbitration last May. Kandela then appealed and lost. In September, Porch filed a case to enforce the award.

In its bankruptcy application filed on Monday, Kandela described itself as a “letterbox company without assets and business operations” and thus without the solvency of the arbitral award. The firm said it tried to settle the matter for “an amount it felt it could collect for satisfaction” but was repeatedly turned down.

“The immediate filing is the result of Porch and his vengeful efforts to harass Kandela to enforce an otherwise irrecoverable judgment. Kandela has no assets, no employees and no business operations. Accordingly, Kandela has filed this case to finally close this chapter of his life in the best interests of his estate and creditors,” the petition reads.

Kandela put the value of his fortune at $6,529. His liabilities, meanwhile, totaled nearly $1.8 million, spread across nine creditors.

The post Transferring Concierge Startup Kandela Declares Chapter appeared first on DAILY SAN FRANCISCO BAY NEWS.