News Column

Dispute over assigning value to DIA art goes back to court

May 15, 2014

By Mark Stryker, Detroit Free Press



May 15--The fight over the treasures at the city-owned Detroit Institute of Arts returns to federal court today as Judge Steven Rhodes hears arguments over whether the city has done enough to properly value the art.

At the center of the hearing are motions filed by some of the city's largest creditors. The motions demand that the city consider outside financial offers for the art and would force the DIA to provide access to a tsunami of historical records. They also would allow art to be removed from walls to be photographed.

Major bond insurers Syncora and Financial Guaranty Insurance Co. -- who could collectively lose more than $1 billion in Detroit's bankruptcy -- are leading a charge arguing that emergency manager Kevyn Orr's restructuring plan for the city greatly undervalues the art. The core of Orr's plan is the $816-million, art-for-pensions deal that would funnel money from charitable foundations, the DIA and the state into shoring up pensions while sparing a sell-off of DIA masterpieces.

The city contends that the deal, which has been endorsed by major retiree groups, fairly accounts for the art based on an estimate by Christie's auction house that said the value of roughly 2,700 works at the DIA bought with city funds was less than $900 million. But the creditors say the entire collection is actually worth billions, and that they have lined up four potential bidders willing to spend up to $2 billion for all or portions of the collection.

The creditors continue to push for a sale of art, but the question of whether the art could legally be sold is a separate issue not expected to be addressed today. It will, however, likely come up in the fight over Orr's plan at the confirmation trial in July.

Creditors said they should be given access to DIA art and records for matters of due diligence. But earlier this week, the DIA asked Rhodes to block creditors from removing thousands of works from walls and archives; the creditors want to snap digital pictures of the front and back of each piece. The museum said in a filing that moving so much art in a short amount of time "invites disaster" and "poses serious risk" to the often-delicate conditions of the works.

The museum also argued that the demand was overly burdensome, effectively requiring two or three staff members to oversee each operation and necessitating closing of portions of the museum for long stretches. The DIA said it already provided creditors with nearly 90,000 pages of records and argued that it was unreasonable and risky to have to provide more than a million additional pages, many of them old and in poor condition and not easily accessible.

Contact Mark Stryker: 313-222-6459 or mstryker@freepress.com

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(c)2014 the Detroit Free Press

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Source: Detroit Free Press (MI)


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