Detroit bankruptcy creditors ask judge to take steps toward sale of DIA treasures

[Faygo Kid]

Source: Detroit Free Press

A coalition of the largest creditors in Detroit’s bankruptcy is taking the first legal step toward pressuring the city to sell art at the Detroit Institute of Arts.

Three bond insurers, the city’s largest employee union and three European banks filed a motion in federal court this afternoon asking Judge Steven Rhodes to appoint a committee to oversee an independent evaluation of the market value of the multibillion dollar city-owned collection at the DIA.

The motion formally takes the fight over the fate of the DIA into court for the first time. The filing suggests major creditors are unlikely to agree to any restructuring plan if they believe Detroit emergency manager Kevyn Orr is offering a low-ball figure for the value of the art. The move increases the chances that Rhodes will ultimately be forced to decide whether the art can legally be sold.

An executive at New York-based bond insurer Financial Guaranty Insurance Co., which led the drafting of the filing, told the Free Press in an exclusive interview that the city must sell art to satisfy creditors. . .

Read more: http://www.freep.com/article/20131126/NEWS01/311260119/detroit-institute-of-arts-detroit-bankruptcy

---

This could be the beginning of the end for a truly great museum.

[cosmicone]

1. A city can't screw its creditors and keep the art.

As shameful and sad this is, I side with the creditors on this one. They paid the money, city officials signed the notes, they deserve to be paid.

[Demo_Chris]

4. Of course. It's sad, but there it is. nt

[pangaia]

11. Sell the Detroit Lions !!

[navarth]

36. Ouch.

[pangaia]

39. OOppss. apologies.

Just being--- sarcastic.

[navarth]

55. it's ok...

After the Tampa bay game a lot of people would agree with you. But back to the main subject of the thread........(go lions.....I hope....)

[24601]

53. Maybe could have seized them by eminent domain when they really sucked, but now that they are

up to 6-5, their FMV is more than the city can pay.

[KamaAina]

15. It's a little more complicated than that.

For instance, taxpayers throughout Wayne County, and in two adjacent counties, pay a special tax to support the DIA. So it isn't just Detroit's alone.

[hack89]

60. Only part of the collection is owned by the city

There would still be a DIA.

[okaawhatever]

31. The other question is, what collateral is traditionally put up for city and/or county bonds. If

that type of asset is traditionally considered collateral when issuing bonds, then I agree. (except for what someone else posted about the county and Wayne County also paying for it, which would give them a claim).

While the creditors are owed money, we have to remember purchasing bonds is an at-risk investment. The reason Detroit paid higher interest rates was because there was a greater risk of losing money. I know early on the emergency manager or someone else tied to the Governor proposed making the bond holders whole and cutting pension benefits by almost 80%. Sorry, bond purchasing is an at risk investment and you may not get 100% back. What they were trying to do in the beginning should be criminal. Also, the tea party/Republican types have said this is ground zero for new laws trashing unions and pensions. They want scotus to rule they can legally screw them out of their benefits.

[aquart]

35. And their art.

Can creditors demand Central Park be sold to developers if NYC goes belly up?

[24601]

54. You can demand anything you want. Whether the court will order it is the issue. The fundamental

question would be, if the city had no lower priority assets to satisfy their debts, why not? If governments don't make good on their debts, who would ever buy their bonds in the future? No bonds would mean all revenues have to come from taxes & fees and that can produce its own death spiral as businesses (and then people) leave the jurisdiction.

[Union Scribe]

2. Sickening.

The looters are coming and the unelected tyrant that took seige of Detroit will hold the door open for them.

[yeoman6987]

52. Selling Art and stuff

This is brilliant. They are going about it perfectly and responsibly. When a person is ready for bankruptcy, they don't go selling the car or their house first. They sell the jewelry and stuff that is not a necessity. Thank God Detroit bankruptcy is being run by adults.

[CTyankee]

58. Or maybe a better analogy is the selling of body parts...

Detroit is having to sell its heart and soul...as someone else so aptly put it, you don't see Italy selling the David or the contents of the Uffizi to satisfy its national debt.

But this is America. How depressing.

[tabasco]

65. Art. Not a necessity.

I pity you.

[yeoman6987]

66. Pity

Don't pity me. I don't live in Detroit or Michigan for that matter so I don't have a dog in the fight.

[kwassa]

67. Art is the necessity. Now and always.

[Tansy_Gold]

3. fuck them. Fuck all of them.

They will gobble it up and put it in their private collections because they think the poor people, the slobs, the peons, the peasants don't and can't appreciate "good art." They are greedy hoarders, who will buy OUR art (and I'm not even a Detroiter or a Michigander) with money they stole from US, from the sweat and blood of OUR labor, and they will claim it is theirs by right of conquest.

Oh, no, they won't use words like that. They'll cloak their theft in pretty word, euphemisms, that will make it sound like they're protecting the art for the ages, for the people who will appreciate it.

Are they any worse than looters? No, they aren't. They ARE looters. They are looting the heart and soul of people. All people. Real people.

Fuck them. Fuck them a million times over. When their eyes have been eaten by maggots and their fingers have turned to dust, may whatever frozen scraps of souls they still possess burn forever in a black and silent void.

[Union Scribe]

5. Amen.

It feels like that was plucked right from my chest.

[Demo_Chris]

6. How do you suggest the creditors collect their money?

[pangaia]

13. Sell the Lions, Tigers and Pistons !

The parts that the city owns.

[Demo_Chris]

17. Okay, but the city is 20 BILLION in debt...

So it's gonna take a whole lot more than that. In any case, I don't know that the city owns ANY of these teams.

The Pistons:

http://www.forbes.com/lists/2008/32/nba08_Detroit-Pistons_320844.html

The Lions:

http://www.forbes.com/lists/2006/30/06nfl_Detroit-Lions_300486.html

The Tigers:

http://www.forbes.com/lists/2011/33/baseball-valuations-11_Detroit-Tigers_332729.html

This is a very real crisis. This city is positively drowning in debt and it doesn't look like it's going to get better. Honestly I don't know what to do, but I know that there aren't any easy answers. And no, I absolutely oppose bailing them out.

[pangaia]

23. Can't argue with you there.

But why is it ALWAYS the art, music, that goes first...or near the beginning when there are budget cuts.
I don't know the answer either but that sure is not what I would like to see.

[Demo_Chris]

26. Because those things are LUXURIES. They are treasures. nt

[pangaia]

30. I agree they are treasures, as in National Treasure or

International Treasure. I do not agree they are treasures as in 'Come to me my precious' (treasure). I also do not agree that they are luxuries.
Great art is needed... to teach, to deepen, and to balance the out of balance in the world.
Would you call Richard II, Henry IV Parts 1 and 2 and Henry V luxuries? The B-Minor Mass? Beethoven's Opus 109? Cosi? The many Water Lilies? I would not.

[Tansy_Gold]

14. I suggest the creditors go fuck themselves

Write it off. Yes, I'm suggesting they write it off. I suggest that they grow some humanity or be called the vampires that they are and be sent scurrying back into their pestiferous coffins.

Don't come to me with whines about the poor, oppressed creditors. The bloodsucking banks and hedge funds, and yes even the union pension funds. They if anyone should know that if you take a community's soul you leave it with nothing. You leave it with no reason to be human. You want mercy for the moneylenders? Don't ask for it from me. I have none.

http://www.marchandmeffre.com/detroit/

[Demo_Chris]

18. You understand that the major creditor filing suit here represents PUBLIC WORKERS right?

So good call, fuck those union workers.

In any case, that's not how it works. The city borrowed the money and they have to pay it back. It might suck for the people who live there, but then most people in America live in a place where they don't have access to billions of dollars worth of art.

[Tansy_Gold]

28. I understand that.

And I also understand that given the nature of the bankruptcy and the fact that this is not cut and dried, those union pension funds may never have known the DIA was part of the "collateral." And maybe they wouldn't have mortgaged their city's soul if they'd know the leeches and parasites would come to collect it.

Do they want their money back? Of course they do. And I suspect there was some sense that they were going to be helping their city get back on its feet by lending it that money.

But there are times when a bad debt needs to be written off, when the greed has to be set aside and other means found.

[safeinOhio]

32. All investments involve risk.

I doubt that those city bonds were ever triple A ratted. On the other hand city workers, work and retire with legal contracts.

It's time to put risk back in investments. Seems, only Ice Land knew that. Same thing with the 2008 housing deal. Pay the bankers and investors and screw the home owners to save the rich and poor choice investments.

[lunasun]

51. +1 well said

[KamaAina]

20. From Goldman Sachs?

http://www.democraticunderground.com/111643983

[Tansy_Gold]

29. Amen, Amen. n/t

[JDPriestly]

42. Loaning money means assuming risk.

We need to pass laws that protect art in publicly owned museums from creditors. The art belongs to the children of Detroit, all the people of Detroit, and it should be out of the reach of creditors as should public parks.

[No Vested Interest]

10. Wouldn't art of this magnitude be auctioned by the largest galleries

and purchased by other museums, both national and international?

[Tansy_Gold]

41. Many museums can no longer afford their existing collections

New acquisitions? Sometimes out of the question.

Between security and insurance, and bidding against the trillionaires, museums that make art available to the peasant class no longer have a chance.

DIA is only one. It maybe the first, but it won't be the last.

Am I making some people angry?

Good. Then I'm doing my job.

[No Vested Interest]

43. I'm sure you're correct, in many instances

I was so happy to read, in the last few days, that the Cincinnati Art Museum, in my city, had just acquired a large Elizabeth Nourse painting from a local woman's club. I had seen that piece hanging in the woman's club a number of years ago and wondered, even then, about proper security for it - could the club afford it, and was the painting safe where it hung.

According to the newspaper, funds were exchanged, though I have no idea if it was anywhere near the value of the painting - likely not. The Woman's club will use the funds to support their charities, and, meanwhile, a wider audience will enjoy the beauty of the work and it will be secure in the Art Museum.

It would be a reason to travel to Detroit to see the works of the DIA before any dispersal happens.

[UpInArms]

24. best post evah!

UIA :hearts: Tansy_Gold

[warrant46]

38. The Billionaire owners of the private Art Collections will have a field day

Alice Walton et al

David Koch et al

The bond traders at Goldman Sachs ---J. P. Morgan Chase et al

The Default guys at AIG et al

The Banksters at Wells Fargo and Bank of America et al

It will all disappear into the gated communities to be hoarded by this epochs Temple Shills

[Tansy_Gold]

40. As I said

Fuck them all.

[warrant46]

49. +1 N/T

[louis-t]

7. And asshole Orr will shrug his shoulders and say

"Gee, they forced me to do it" after saying he had no intention of selling it off. I've been saying from day 1, they will sell it. Anyone here who says they are "siding with the creditors" doesn't get it. The people who will suffer for this are not the ones who got the city in trouble. This is OUR art, not Kevyn Orr's, not Kwame's, or any of the others that ran the city into the ground while lining their pockets.

[malthaussen]

8. I get it! It's another way to tax the rich!

Since we haven't got the guts to, you know, actually tax the money-grubbers, we'll get them to spend what we would have mulcted in taxes on the art in the museum! The bills get paid, and they get to brag about the cool acquisition they made, and of course humiliate and insult the public in the process. It's a win-win! Well, except for civilization and shit like that.

-- Mal

[No Vested Interest]

9. There are likely a number of works lent or donated with contingencies

that will preclude their sale.
Perhaps the DIA will continue to exist in a diminished form.
I hope those who run the DIA are rallying people locally and nationally to their plight.
Very sad.

[bucolic_frolic]

12. They need a White Knight

a wealthy philanthropist who buys the art and pledges to keep it in Detroit on display

Surely there are wealthy people in Detroit

Looting museums is what the Nazi Nobility did

It shouldn't happen here or anywhere

[Tansy_Gold]

16. "Nazi Nobility" -- you said it perfectly. n/t

[caraher]

19. The (R) state attorney general says they can't sell the art

It's not a final legal opinion, but when even the teabaggers say they can't sell it off there's hope:

“The art collection of the Detroit Institute of Arts is held by the City of Detroit in charitable trust for the people of Michigan, and no piece in the collection may thus be sold, conveyed, or transferred to satisfy city debts or obligations,” Schuette said Thursday in a statement.

Schuette’s 22-page opinion that selling DIA art would run afoul of charitable trust law in Michigan does not settle the legal issues. But at least one lawyer who specializes in art and cultural history issues said it provides persuasive support for the museum, and marks the state’s top law enforcement official as an ally should the conflict wind up in court.

[blackspade]

21. Screw these 1% assholes

Thieving from the public trust as usual.

[yeoman6987]

59. Art

Well it looks like they can't sell the art. Good God wait until you see what they ultimately do. You guys will have wished they sold the art. It is going to get ugly!!!

[blackspade]

62. Do tell then.

What are they ultimately going to do?
Why are us guys going to wish they sold the art?

[yeoman6987]

63. What will they do instead

I think they will cut the pensions big time. Continue to cut education, police, emergency services, etc. That is if we are lucky...it might even be worse. 40 billion is a lot of money to find cuts.

[blackspade]

64. So they sell the art....

and then they go after pensions, education, police, emergency services.
The point is that these 1% leeches will go after it all regardless.
If going after the art museum mobilizes folks so that they can't get to the pensions, etc. then that is a good thing.

[blkmusclmachine]

22. Nazis pilfered art, too.

[DFW]

25. And just HOW will the art be sold?

Let me guess--Rick Snyder gets some "independent" assessors to make lowball evaluations, upon which his pals get to buy it all at the assessed price and then sell it off a couple of years later, tripling their money on their "astute" investments, or..........

They make a sweetheart deal with either Christie's or Sotheby's, both of whom charge a seller's fee of between 20% and 25% plus a buyer's fee of 20%, which means they rake in 40% of the net price paid by the buyers, and then kick back a third or more of their take to Rick Snyder and his cronies.

[Amimnoch]

27. Can the citizens sue the city?

I don't know if this kind of approach has any precident, but maybe a citizens coalition to form a suit against the city as well with a claim that the public funds paid for the art as much as the creditors funds can claim to have paid for them? Maybe something along the lines of claiming the city holds the art in trust for the citizens whose taxes paid for it?

Sort of If I buy my brother a car, the car is in my name, but he has the insurance policy on the car, and a creditor goes for his car, I have a claim to the car because it technically doesn't belong to him. But on a much broader scale.

[hack89]

61. The citizens ARE suing the city

The public employees union is one of the creditors suing the city.

[madrchsod]

33. art is the new status symbol for the multi billionaires of the world

http://www.reuters.com/article/2013/11/15/art-auction-hedgefunds-idUSL2N0IY22A20131115

http://america.aljazeera.com/articles/2013/11/17/rise-of-billionairesacrosstheworldvaultsrecordartsales.html

they`ll sell it and the paintings will bring 100`s of millions of dollars or what ever currency the uber-rich use.

[llmart]

34. I've been to the DIA many times.....

it is truly a treasure that's been around for a very long time.

Ole' money grubbing Snyder wants to sell off everything from Belle Isle to the art in the museum. Maybe he could pony up some dough by selling his fancy schmanzy mansion in Ann Arbor? Typical greedy Republican who thinks us lower middle class people don't deserve nice things or the access to them.

As Tansy Gold said so eloquently "Fuck him".

[navarth]

37. Everybody's failing to mention the REAL big one they intend to steal:

THE WATER WORKS. How long have the suburbs been wanting to get their greedy hands on it?

I still hold a suspicion that they will let us keep the DIA but take the Water Works. Of course I might be underestimating them.

Support Schauer for Governor. It's one way to fix this.

[Monk06]

44. This is what happens when you sell municipal debt on the open market to derivatives traders.

Detroit was deliberately driven into bankruptcy by corporate asset liquidators. The DIA collection is one of the finest if not the finest publicly held collections in the US. It this that collection that the banks had in their sights all along. It will broken up and disappear forever into the vaults of private collectors for pennies on the dollar, mark my words.

[Demeter]

47. Yes. It was looting to make the Visigoths envious

and it should not be rewarded.

[JVS]

45. I'm really surprised the DIA hasn't found institutions in other cities to lease or buy some stuff.

[JustABozoOnThisBus]

46. Snyder and Orr will sell to the highest bidder

and that may be private investors in Oman, Shanghai, Singapore, Moscow.

Fleets of school buses will no longer bring kids to see fine art. Kids from Detroit. Kids from all over southeast Michigan.

It would be a loss for the region.

But, it's for the creditors.

[DonCoquixote]

48. to those that keep saying "the creditors need to be paid"

Do keep in mind that these loans were made by creditors who have been caught about the status of "aaa" binds, getting cues from ratings agencices that lie (like S and P) and then adding their own lying. AlsoMichigan appointed this city manager, he was niot demcoraticly elected, and if you put the desires of a false goverment over creditors, you might as well remove all rights of people.

[bluedeathray]

50. Are you paying attention?

This is what it's going to look like as the bankster led financial industry consumes other American cities.

It's their world. And you are just overpopulating it with your "needs", and your "rights", and your "laws".

Until we MAKE it stop.

[Nihil]

56. Disaster capitalism comes home to roost.

The correct response here (as in other places around the world) is to raise the
polite equivalent of two fingers and parrot that phrase that is always tagged onto
every advert from the gamblers on Wall Street & the like:

"The value of your investment can go down as well as up
and you may not get back what you invested."



(And for the people who bleat "But the union needs to get money too" the answer
is, as always, "Do not gamble what you can't afford to lose". End of argument.)

[hunter]

57. I'm going to post my National University idea again...

... this could be part of it.

I think Detroit would be the perfect place for a National University. Tuition would be free, food and housing would be free, and it would accept students from every state and U.S. territory. It would also accept children of undocumented workers who graduate from U.S. public high schools and plan to become U.S. citizens.

Majors and certifications would be somewhat limited to subjects where there is a public need, for example primary care physicians, nurse practitioners, physicians assistants, teachers, other professions now often open to H1-B visa workers, etc., etc.

It would be a place where students from wealthy to impoverished backgrounds, students of all ethnic and cultural backgrounds, could interact with one another and learn how to work together. Since this would be one of the goals of the university, I think it should be a single campus, to prevent geographical segregation.

Upon graduation there would be no obligation but to go out and make the world a better place.

http://metamorphosis.democraticunderground.com/?com=view_post&forum=1002&pid=3795418

This could be a part of such a Federally funded institution.

In any case, this museum is worthy of a Federal intervention. If such actions are good enough for the mega-banks or General Motors, it's even more appropriate here.