WASHINGTON Aug 6 Toyota Motor Corp is pledging
$1 million toward an agreement intended to help the city of
Detroit exit bankruptcy without having to sell off its art
collection, the Japanese auto company announced on Wednesday.
The "grand bargain" is the lynchpin to Detroit's plan to
adjust $18 billion of debt and exit bankruptcy. Under the
agreement, the Detroit Institute of Arts and other groups will
contribute $466 million over 20 years and the state of Michigan
$195 million to ease pension cuts.
City creditors opposed to the plan say Detroit should sell
or monetize an art collection worth billions of dollars to
increase settlement payments.
The art institute has been raising funds for its $100
million part of the bargain, and currently has more than $80
million in pledged donations. Detroit's big three automakers
have promised to contribute $26 million.
Detroit, also known as the Motor City, is the historic hub
of automobile manufacturing in the United States.
"Detroit and the surrounding areas are vitally important to
the automotive community. They deserve our support," Simon
Nagata, president of Toyota Motor Engineering and Manufacturing,
Inc., said in a statement.
No one is sure of the art collection's value, and the
estimates of its worth span a wide range. Hold-out creditor
Financial Guaranty Insurance Company says the collection is
worth at least $8.55 billion, while the city and institute put
the value at closer to $4.6 billion.
If U.S. Bankruptcy Judge Steven Rhodes determines the
bankruptcy plan is fair and feasible, then it could be approved
over creditor objections. On Wednesday, Rhodes held a
preliminary hearing to prepare for the plan's confirmation
hearing set to begin Aug. 21.
(Reporting By Lisa Lambert)