The Los Angeles Times is reporting that Detroit creditors in the city’s municipal bankruptcy case are pushing for the entire collection of the Detroit Institute of Arts’ to be sold to help repay a portion of the city’s debt. The museum’s collection contains 66,000 pieces, and the Detroit News is reporting that bankruptcy managers have started the process of appraising them. A previous appraisal had included just 1,700 pieces that the museum had purchased using city funds due in part to the fact that the pieces being purchased with public money would have made them easier to sell without having to clear any legal hurdles.
The previous appraisal of the 1,700 pieces purchased with public funds was completed by Christie’s auction house and estimated the art to be worth between $454 million and $867 million. Creditors led by Financial guaranty Insurance Co. stand to lose as much as $1.1 billion if the city defaults on it’s current debts.
A trial scheduled for July will determine whether or not the city can move forward with it’s current plan for repaying creditors. The current plan does include saving the Detroit Institute of Art’s collection by pulling together $816 million that would be used to pay retired city workers pensions and medical benefits. The money would come from multiple sources including charitable foundations, $195 million from Michigan’s state government and trade unions. The DIA has pledged to raise $100 million.
Creditors are not happy with the plan, as they feel that the decision to make the museum’s art collection off limits to creditors essentially amounts to the collection being held for an $816 million ransom. Creditors are hoping to see the money be split up among more creditors than just city workers or for the collection to be used as collateral to secure loans for debt repayment.
The Detroit Institute of Arts is the second largest municipally owned museum in the country and contains art from all over the world. Art has been collected by the museum since its opening in 1883.