Detroit bankruptcy: Will city's storied art collection be sold? (+video)
Detroit's emergency financial manager has broad discretion to decide what to sell or lease during bankruptcy, including a world-class municipal museum and its masterworks.
Besides looking for ways to cut operating costs and assessing obligations to pensioners and retirees, a bankrupt Detroit is also turning to its public assets, such as its airport, parking garages, and its publicly owned art to find ways to chip away at its $11.5 billion of unsecured debt.
The potential sale of its public art collection, which includes masterworks by Rodin, Degas, Van Gogh, and Cézanne, is generating the most controversy. Emergency financial manager Kevyn Orr announced Monday that he is hiring Christie’s Appraisals Inc., the famed New York City auction house, to appraise a portion of the collection at the Detroit Institute of Arts on the behalf of creditors who are requesting the assessment, which then might be used in a sale or leasing situation to help pay back the debt.
Creditors have good reason to demand the assessment. When Mr. Orr announced Detroit was filing for Chapter 9 bankruptcy in July, he said he wanted to stop paying unsecured debt to creditors and, instead, restructure the terms to offer them 10 cents or less on the dollar.
But Orr is assuring the public that he is looking at the art collection, among other assets, as a way to “create value from the asset without a transfer of ownership.”
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