efe-epaBy Cynthia de Benito Lisbon

Three banks have filed a lawsuit against a Portuguese businessman who has allegedly racked up 1 billion euros ($1.12 billion) worth of debt and who owns the most visited art foundations in Lisbon.

Joe Berardo, once much loved in Portugal for being a self-made migrant, now stands accused of owing Caixa Geral de Depósitos (a state-owned bank), the Portuguese Commercial Bank and Novo Banco 962 million euros.

In April the three lenders lost their patience with Berardo and filed a lawsuit against him to recover debts, throwing into doubt the fate of the vast art collection he has amassed.

The case has triggered a dilemma between the state and the banks, after the government partnered with Berardo to open his collection to the public by creating a foundation (Fundação de Arte Moderna e Contemporânea - Colecção Berardo) in order to create a permanent exhibition space at the Cultural Centre of Belém (CCB) for some 1,800 artworks.

The issue lies in that the businessman used as guarantees to his loans 75 percent of the works from his collections.

The Berardo Museum is the most visited one in Portugal according to The Art Newspaper.

Highlights of the collection include works by Francis Bacon, Salvador Dalí, René Magritte, Pablo Picasso and Man Ray.

The Portuguese government, considering the nation lacked a solid collection of contemporary art, reached an agreement with the businessman to sponsor the public viewings of his collection until 2022.

The dictatorship of the Estado Novo (1933- 1974) shunned any contemporary art of those years, which left Portugal with a big cultural deficit for this period, Isabel Pires de Lima, Culture Minister at the time of the museum's launch in 2006, told Efe.

"There is no other collection in Portugal with these characteristics that can be exhibited and enjoyed by the public," Pires de Lima said.

The former minister added that there were several works from the Surrealist period that were very valuable and considered unique.

One of the key concerns is that the artworks should not leave the country nor the CCB.

Portuguese media have speculated that an agreement between the government and the banks is being sought to safeguard the collection.

"At this stage, we will not make any comments," sources from the Ministry of Culture told Efe regarding the veracity of the alleged negotiations.

Many doubts about the case have surfaced, such as whether the government would be able to purchase the works.

Prime Minister António Costa said in Parliament that the state would have the opportunity to acquire the collection due to the agreement that was penned in 2006 between the state and the entrepreneur.

At the time Christie's valued the collection at some 316 million euros.

"It would be incredibly worrying for Portugal if the state lost the possibility of having some control over this collection," Pires de Lima told Efe.

She is of the opinion the country needs to rally and make a huge effort to keep the artworks in Portugal.

A special task force has been set up by the government with precisely this objective.

The group, with representatives from the Finance, Justice and Culture Ministries are hoping to come up with a solution that would ensure Portugal can continue to enjoy the Berardo Collection. EFE-EPA