July 9 The Detroit Institute of Arts collection
may be worth as much as $4.6 billion, but a sale of art works
would raise less than $2 billion to pay the bankrupt city's
creditors, according to a report released on Wednesday.
Michael Plummer, an art expert hired by the institute and
the city to evaluate the collection and ways to raise cash from
it, concluded that litigation and market conditions would
depress prices. Liquidating the most valuable works would
eventually force the museum to close, in his opinion.
"Rather than being a source of cash to creditors or a burden
on the current city, in fact, the DIA is the single most
important cultural asset the city currently owns for rebuilding
the vitality of the city," Plummer reported.
Some of Detroit's hold-out creditors have been pushing the
city to sell or monetize art works to increase settlement
payments in the city's plan to adjust $18 billion of debt and
exit the biggest municipal bankruptcy in U.S. history.
"The report makes it abundantly clear that selling art to
settle debt will not generate the kind of revenue the city's
creditors claim it will," said Bill Nowling, spokesman for
Detroit Emergency Manager Kevyn Orr.
A spokesman for one of those creditors, bond insurer
Financial Guaranty Insurance Co, declined to comment.
Plummer, principal of Artvest Partners LLC, which was paid
$112,500 to produce the report, estimated the collection's value
at $2.76 billion on the low end, $3.68 billion in the mid-range
and $4.6 billion on the high end.
A sale using the mid-range estimate would fetch as much as
$1.8 billion or as little as $1.14 billion.
The collection includes "The Wedding Dance" by 16th century
painter Pieter Bruegel the Elder as well as works by Vincent van
Gogh and Rembrandt.
Under the so-called grand bargain in Detroit's debt plan,
$366 million pledged by the DIA and philanthropic foundations
and $195 million from the state of Michigan would be tapped to
ease pension cuts for city retirees and prevent the sale of DIA
Artvest Partners' report warned that likely lawsuits from
Michigan Attorney General Bill Schuette, who has maintained the
collection cannot be sold under state law, art donors and others
would take years to resolve.
The art expert also said options to monetize the collection,
including its use as collateral for a loan, were impractical.
Plummer's report follows an appraisal by auction house
Christie's in December that estimated the fair market value of
about 5 percent of the DIA's collection at $454 million to $867
million. While the new report was more extensive, Plummer noted
that a full assessment or cataloguing of the collection would
require at least 18 months.
A federal judge overseeing Detroit's historic bankruptcy has
scheduled an Aug. 14 start date for a hearing on the fairness
and feasibility of the debt adjustment plan.
Late on Tuesday, bankruptcy court mediators announced an
agreement between the city and its hold-out police union "on
important core economic terms that will become part of a
multi-year collective bargaining agreement." As part of the
deal, the union urged its members to vote in favor of Detroit's
debt plan just days before Friday's deadline for the return of
(Reporting by Karen Pierog; Editing by Jan Paschal)