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Michigan governor to push plan to protect Detroit art, pensions: court
January 22, 2014 / 6:59 PM / 4 years ago

Michigan governor to push plan to protect Detroit art, pensions: court

(Reuters) - Michigan Governor Rick Snyder is set to announce “significant state participation” in a plan to aid Detroit’s art museum and public pensions, mediators said Wednesday, as the city works through its historic bankruptcy.

Michigan's Governor Rick Snyder (C) is acknowledged by the Assembly before his annual State of the State address at the State Capitol in Lansing, Michigan January 16, 2014. REUTERS/Rebecca Cook

The move by the state’s Republican governor comes after plans for state involvement first were reported in local media last week. At the time, Michigan House of Representatives Speaker Jase Bolger, a Republican, indicated he would not support state participation in any direct bailout of Detroit.

Snyder’s spokeswoman, Sara Wurfel, confirmed the governor and Republican legislative leaders will hold a press conference concerning Detroit later on Wednesday.

The U.S. Bankruptcy Court mediators’ statement said the governor intends to work with the state legislature to gain support for the plan.

“We hope that the governor’s announcement will further assist the parties in reaching as many agreements as possible which can be included in an agreed-upon plan of adjustment,” the mediators said in the statement.

Last week, a group of foundations said they pledged more than $330 million to help preserve the Detroit Institute of Arts’ collection and assist in shoring up the cash-strapped city’s retirement fund.

With Detroit sinking under more than $18 billion of debt and liabilities, its state-appointed emergency manager Kevyn Orr filed the biggest Chapter 9 municipal bankruptcy in U.S. history in July.

Orr has opened the door to possibly monetizing some of the artwork, while severely cutting pension benefits. Detroit’s biggest creditors are its pension funds and Orr has pegged the city’s unfunded pension liability at $3.5 billion.

Last month, auction house Christie‘s, which was hired by the city, appraised the value of Detroit-owned works at $454 million to $867 million. Later on Wednesday, U.S. Judge Steven Rhodes, who is overseeing Detroit’s bankruptcy, plans to rule on whether the art should be independently valued.

Reporting By Karen Pierog, additional reporting by Joseph Lichterman in Detroit; Editing By Dan Burns and Meredith Mazzilli

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