Detroit judge Steven Rhodes, who is responsible for approving or denying the city’s overall bankruptcy plan, denied creditors who pointed to potential art sales from the collection of the Detroit Institute of Arts. as a source of cash. Attorneys for Syncora Guarantee and Financial Guaranty Insurance, a bond insurer argued that potential buyers should be allowed to look at certain pieces in the collection, including the right to remove pieces from the wall and examine the back. The creditors said they have found buyers willing to pay more than $1 billion for parts or all of the collection. Rhodes, after hearing their argument for an hour said they can visit the museum and enjoy the art on the walls like any other patron.
One idea that has received support from Detroit is a so-called “grand bargain” that includes art and city retiree pensions. It involves $816 million from foundations, philanthropists, the museum, and the state of Michigan. DIA has promised to raise $100 million of the $816 million in an effort to ease cuts for retirees whose pensions are being reduced.
In an encouraging turn of events for the museum, Rhodes has reiterated that one-time asset sales are not a good idea. He pointed out that art would not have been available to creditors if Detroit has chosen to skip bills and fix finances before it was forced to declare bankruptcy.