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Will The Art Go?


Detroit won’t hear from a court whether it is allowed to enter bankruptcy until early next week, but its numerous creditors are already working to divide the city’s assets. On Tuesday, a group of creditors comprising an unusual mix of financial institutions and city unions, asked the court to create a new commission to value the Detroit Institute of Art’s collection, trying to pave the way for a future sale.

This move shouldn’t come as a surprise—things have been moving in this direction since early this year—but this comes after the city already appointed Christie’s to value the art in August, suggesting that the creditors are looking to squeeze every last dime out of the collection. As the WSJ reports:

A sale could sharply boost what creditors get from the city, which has $18 billion in long-term debts, has defaulted on multiple bond payments, and had a cash balance of $128.5 million during the quarter ending Sept. 30. Detroit is awaiting a ruling next week to determine whether it is entitled to municipal bankruptcy protection. If Bankruptcy Court Judge Steven Rhodes decides that Detroit is eligible for Chapter 9 protection, the city is expected to file its proposed plan to restructure its debt by mid-December. The art is expected to be valued at more than $1 billion, according to the Tuesday court filing.

“This motion doesn’t compel a sale,” said Derek Donnelly, managing director of bond insurer Financial Guaranty Insurance Co., which spearheaded the motion draft. “It just establishes a communal framework for addressing value maximization of the artwork.”

The museum, for it’s part, is fighting the potential sale of its art as hard as it can, arguing that any art sale could effectively mean the end of the institution. While that may be right, given Detroit’s current financial state, that kind of emotional appeal may not carry as much weight as the museum might hope.

[Museum patrons view Diego Rivera’s “Detroit Industry” frescos at the Detroit Institute of Arts on October 2, 2013. Photo courtesy of Getty Images.]

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  • NCMountainGirl

    Can the city sell it? How many of the donated works are restricted donations that revert back to the heirs if the Institute tries to dispose of it? That is a common term on the deeds of such works. Also, I believe the artworks thenselves are titled to a trust, not to the Art Institute. Also, in recent years the Institute has not gotten financial support from the city. It raises its own money, mostly from the ‘burbs. The legal battle could be epic.

    • Corlyss

      Sell the stuff and work out the details later. Sovereigns can get away with a lot. God knows, this administration and those like-minded individuals it coaches and trains has no respect for the law.

  • Andrew Allison

    This seems crazy: If the city does actually put the art up for auction, the auctioneer (who, in the immortal words of Tom Lehrer, gets a good percentage of the rice) will seek the highest bidder. Meanwhile, money spent on duplicating Christie’s evaluation effort is money down the drain.

  • free_agent

    It seems to me that the only real hope is a massive fund-raiser to buy the works (at full value and to the degree that they are freehold of the city) and reconstitute the museum as an autonomous non-profit.

  • Corlyss

    Whatever will teach ’em a lesson should be put on the auction block.

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