Vultures Everywhere! Detroit

      It becomes hilarious how the vultures and the Chinese are trying to buy everything and everyone even as they cut out the auction houses.  To the victor the spoils!

Visitors walk past Breughel's 'Wedding Dance' in the Detroit Intitute of Art

The deal of the decade is in play as potential suitors for the 60,000 strong collection of the troubled Detroit Institute of Art start to make offers. The Chinese clearly want the Chinese part of the collection and have made 2 offers through the little known Yuan Capital of Hong Kong and the Beijing based state-owned Poly International Auction Room. Other suitors include Catalyst Acquisitions, Bell Capital partners and Art Capital Group. Presumable Qatar must be behind one of the bids or will be lining up a bid. Offers seem to be around the US$1bn – US$2bn mark. The growing interest is because the collection could be worth in the US$10 – 20bn range and the circling sharks smell blood and a huge profit.   So far there doesn’t appear to be a Russian suitor but, if President Putin wants to wind up the Americans, there would be no surer way than by putting in a Russian bid.

The story is receiving coverage in the Financial Times, the Wall Street Journal and the Detroit Free Press.  The Art Market Monitor provides a good summary of the situation as follows :-

The Detroit Free Press and Wall Street Journal both have greater detail from the court documents and their own reporting on what the various expressions of interest are concerning the Detroit Institute of Arts collection. The effort is being driven by a bond insurer that stands to lose a great deal of money in the bankruptcy. To stave off their loss, the FGIC has solicited interest from a range of financial entities. One is a collector offering to buy the whole collection or nothing at all. Another offer comes from Poly Auction just to acquire the Chinese works which raises an interesting cultural question about where those works “belong.”

In documents filed in court, FGIC said its financial adviser, Houlihan Lokey, had “conducted an exhaustive examination” of the value of the DIA by examining works in person, reviewing publicly available DIA records, reading books about the museum and discussing the situation with experts.

The insurer compiled the information into a 259-page document sent to 19 prospective investors after initially contacting 38 parties about potential bids. The insurer listed four indications of interest with prospective bids:

Catalyst Acquisitions and Bell Capital Partners: Offered $1.75 billion for “all assets held in the DIA” to be funded by the two companies and “a syndicate of leading global investors.”

Art Capital Group: Offered a $2 billion loan with the DIA’s entire collection used as collateral. The loan would carry a minimum interest rate of 6% to 9%. A person close to the bid solicitation said the city would likely have to sell some art to pay off the loan.

But some of the proceeds could be used to invest in city services and pay off creditors.

“Art Capital Group is providing financing that enables the people and community of Detroit to keep its treasured art assets,” said Montieth M. Illingworth, spokesman for Art Capital Group, in an email. “Our solution does not require the sale of this art collection. It is one of the country’s most important collections and it should stay in and with the people of Detroit. We also believe that our proposal addresses the requirements of creditors and is superior to the alternatives that have been made available today.”

Yuan Capital: The Asia-based investor offered $895 million to $1.473 billion for 116 specific works, including most of the museum’s most valuable pieces, with funding led by a “consortium” of investors.

Poly International Auction: The Beijing-based auction house offered up to $1 billion for the Chinese art collection, although the bid would be conditioned on a review of the specific pieces owned by the museum.

“Ignoring the proposals, or failing to cooperate with the interested parties to advance the process, would be another egregious example of the City placing politics over the financial and legal realities of the situation – this would almost certainly result in drawn-out litigation, which no one wants,” Spencer said.

Separately, bond insurer Syncora and the city’s retiree committee recently delivered subpoenas to the DIA seeking a massive list of documents detailing the DIA’s collection and finances.

http://www.russianartdealer.com/journal/chinese-circle-detroit

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