Detroit bankruptcy creditors want access to art
DETROIT (AP) — Bond insurers fearing significant losses in Detroit's bankruptcy pleaded with a judge Thursday to give them hands-on access to valuable art, a treasure trove that the city has repeatedly said won't be sold.
Attorneys said potential buyers should be allowed to look at certain pieces at the Detroit Institute of Arts, even remove them from the walls. But the museum claims it's risky, and Detroit remains committed to a separate, unique deal that would prevent any sale and also soften pension cuts for thousands of retirees.
Art has been a hot issue in the bankruptcy case because many creditors believe pieces could be sold to pay debts. City-owned art has been valued at $450 million to $870 million, but some Wall Street creditors say that's way too low.
A so-called grand bargain favored by the city, wrapping in both illustrious art and city employee pensions, involves $816 million from foundations, philanthropists, the museum and the state of Michigan.
"To us, the grand bargain is not grand. It's more grandiose than grand," said Marc Kieselstein, an attorney for New York-based Syncora Guarantee, which could lose hundreds of millions of dollars in the bankruptcy.
He acknowledged the art is a "glittering link to the glory days of Detroit."
"But in bankruptcy, some of those rarified things, those edifying things, have to yield to things more base. Perhaps people would say more grubby" — such as creditor losses, Kieselstein said.
Judge Steven Rhodes promised a decision later Thursday after a long series of skeptical questions for Kieselstein and another attorney.
The creditors said they've found buyers willing to pay more than $1 billion for parts or all of the collection. They have not publicly disclosed the specific pieces they want to examine.
Under Detroit's bankruptcy exit plan, the museum would take control of thousands of pieces of city-owned art already at the museum. The DIA, as it is known, has pledged to raise $100 million of the $816 million pledged to ease cuts for retirees whose pensions are being reduced.