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The chairman of a once-hidden Chicago museum that held a world famous collection of Medieval armor agreed in court Wednesday, along with his wife, to resign and surrender control of the museum`s last $4.1 million in cash assets.
Herman and Bea Silverstein made the agreement, which also involves $1.4 million of the Silverstein`s personal assets, to settle a lawsuit filed by the Illinois attorney general`s office 13 years ago. Judge Albert Green in Cook County Circuit Court, appeared to end the strange story of the George F. Harding Museum.
The artifacts of the Harding Museum were turned over to the Art Institute of Chicago in 1982 as the result of pressure from the state. The $4.1 million will be dedicated solely to maintaining the Harding collection, said Michael Ficaro, first assistant attorney general.
A portion of the armor and the Remington works is on display at the Art Institute.
The total collection of more than 2,000 artifacts, frequently valued at $30 million, began as the personal collection of George F. Harding, a South Side politician and heir to the fortune his father and grandfather made in corn and railroads.
Harding traveled and bought what he liked, including fine suits of armor, ancient weapons, paintings by European masters, antique furniture, rare musical instruments and paintings and sculptures by Frederic Remington depicting the days of the cowboy.
Harding died in 1939. His collection made an awe-inspiring display popular with both adults and children in the museum Harding established in a simulated castle at 49th Street and Lake Park Avenue.
Harding left the museum in his will as a charitable trust.
However, the castle was torn down as part of an early urban renewal project in 1964.
The museum trustees moved the Harding collection to a building at Randolph Street and Michigan Avenue, where it effectively disappeared for six years because the trustees kept the museum closed to the public.
According to Ficaro, in 1967, museum chairman Silverstein used $250,000 of the museum`s funds-through a no-interest loan to himself-to take control of the Mid-America National Bank of Chicago.
In 1976, the attorney general`s office accused Silverstein of violating IRS regulations concerning charitable trust laws by mismanaging the museum assets and failing to allow public viewing of the relics.
Ficaro said Silverstein sold blue chip stocks owned by the museum as well as artifacts, including the auctioning off of the musical instrument collection, to pay mortgage payments and taxes on three adjacent Randolph-Michigan buildings owned by the museum because the buildings did not have enough other tenants to meet cashflow needs.
The no-interest loan to Silverstein, which he repaid in 1969, was not discovered by the state until 1981.
In Wednesday`s settlement, the Silversteins, both in their 80s, also agreed to surrender the title to their $1 million condominium residence at 1040 N. Lake Shore Dr. and control of $316,000 in funds remaining from the Silversteins` sale of the bank. Ads By Google
Those assets will be placed in a trust and will be turned over to the Art Institute, but not until the Silversteins` deaths, Ficaro said.
In the meantime, the Silversteins will be allowed to live in the condo and be paid a monthly annuity of $4,416 by the Art Institute from interest on the $4 million in former Harding Museum money. The institute also will pay all taxes and assessments on the condo as well as the condo`s annual $4,000 maintenance fee.
``The Silversteins are giving up all of the museum`s assets and their known personal wealth to the Art Institute, but they need something to live on so the institute will pay them the annuity,`` Ficaro said.
``The annuity and other payments will not eat up any of the principal $4 million because they will be more than covered by the interest payments,``
The Silversteins also have paid the Internal Revenue Service about $500,000 in excise taxes and penalties, and the museum has paid the IRS about $250,000, Ficaro said.
The $4 million in former Harding Museum assets still face claims for more than $1 million in legal fees resulting from the current litigation and unrelated suits, but Ficaro said he will seek to have those claims reduced.