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Update – Detroit’s Bankruptcy News and the Future of the DIA’s Art Collection

By Fox Rothschild LLP on August 20, 2013
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As a follow-up to my previous post regarding Detroit, many of you may have heard by now that the city filed for bankruptcy in mid-July.  In recent weeks, there is more controversy over Detroit’s bankruptcy filing, which endangers the renowned art collection housed at the Detroit Institute of Arts (DIA).  The art world has been in a tizzy since news hit the press that appraisers from Christie’s auction house had descended on the museum to evaluate the collection.  Critics complained that Christie’s was a vulture preying on Detroit’s mismanagement.  The critics agree with the Michigan Attorney General who as reported earlier issued a letter opinion stating that the collection of art was held in trust for the public and could not be used to payoff creditors.  While early reports indicated that Christie’s appeared in Detroit at a creditor’s request, Christies has officially announced that it was asked to appraise a portion of the collection for Kevyn Orr, the city’s emergency manager. 

Liquidation of the collection remains controversial as a fire sale of the works could wreak havoc in the art market.  Further, local lawmakers in the Detroit metro area have vowed to repeal suburban property taxes which support the DIA if the bankruptcy results in use of the museum’s collection to satisfy the city’s debt.  Despite the ongoing controversy, today, the DIA announced that it would not challenge the bankruptcy filing because the museum supports (excluding a plan to liquidate the DIA collection) efforts to rectify the city’s financial woes.  

While I agree with the sentiment that the DIA collection should remain in Detroit, I can’t help but be reminded that it was unthinkable for many folks that the Barnes collection could ever be moved from its beautiful home in Lower Merion, Pennsylvania – and that happened. 

 

  • Posted in:
    Bankruptcy
  • Organization:
    Fox Rothschild LLP

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