The Detroit Institute of Arts (DIA) has turned to a judge to help keep its art on its walls and out of the hands of the city’s bankruptcy creditors. Last night, the museum filed an objection to a proposal spearheaded by Financial Guaranty Insurance Co. (FGIC) and Syncora, two major Detroit creditors, to reevaluate the art in the museum’s collection, the Detroit Free Press reported. The bond insurers claim that the financial assessment of the DIA collection carried out by Christie’s last summer was incomplete, and are pushing to “physically remove as many as 12,000 works from the walls and archives, snapping digital pictures of the front and back of each piece,” according to the Free Press. They’re also requesting access to more than a million pages of documents, according to the museum, despite the DIA’s claim that it has already offered up almost 90,000 pages of documents related to the collection. The DIA cites the fragile condition of both artworks and documents as part of its objection, and says the FGIC/Syncora plan “invites disaster.”
But the insurers remain unconvinced by the “grand bargain” currently in the works in an attempt to preserve the DIA and its collection. That plan would funnel some $816 million — donated by foundations and the state of Michigan — to Detroit’s underpaid pension funds in exchange for keeping the art safe. The plan additionally requires the DIA to come up with $100 million of its own money to contribute to the fund, and the museum is currently in talks with the Detroit Three automakers — GM, Chrysler, and Ford — to see if they will supply more than half of that sum, the Free Press reported as well. The DIA has also approached the Getty Foundation, whose leaders are said to be “mulling the request.” City creditors like FGIC and Syncora are opposed to the grand bargain because they stand to lose more than $1 billion if it goes through; the plan shores up Detroit’s pensioners but not them. For that reason, some have questioned the legality of the plan, with bankruptcy law professor David Skeel writing in the Washington Post:
A city’s treatment of its creditors in bankruptcy must be “in the best interests of creditors” and cannot “discriminate unfairly.” Best interests means that creditors must get more in bankruptcy than they would outside of bankruptcy; and no unfair discrimination means that Detroit can’t give a much higher recovery to one group of general creditors than to another.