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Art collection assessed as Detroit nears bankruptcy

Posted by Jillian Postal | Jan 21, 2014 | 0 Comments

As the city of Detroit's bankruptcy case survived its first legal challenges in federal court this week, the Detroit Institute of Arts (DIA) remains at the centre of a national debate over what city-owned property can and should be liquidated to help cover its estimated $18bn debt.

At some point in the past two months, Christie's auction house sent two employees to Detroit to assess DIA's collection, according to two sources with knowledge of the trip. The employees did not meet with museum leadership during their visit.

The auction house did not show up uninvited, according to a source familiar with the situation, but it is unclear who requested Christie's services. A spokesman for the city manager Kevyn Orr says his office was not involved. He says he is “unaware” if any of the city's creditors were behind the request, though several sources suggest this is the most likely explanation. A spokeswoman from Christie's declined to comment.

Unlike most museums, DIA's collection and facilities are owned by the city, which makes them vulnerable to creditors if Detroit successfully files for bankruptcy. (A federal judge on Wednesday suspended lawsuits filed by city workers, retirees and pension funds challenging the bankruptcy proceedings.) But according to many museum advocates, as well as the Michigan state attorney general Bill Schuette, the collection is not a traditional asset because it is held in a charitable trust for the people of Michigan. The city, according to a formal opinion issued by Schuette on 13 June, is “limited to using the assets for the designated purpose of [the] trust” — in this case, the acquisition of art.

Whether the attorney general's opinion amounts to state law is open to interpretation and could be subject to a legal fight, the art lawyer Donn Zaretsky said in an interview last month. A bill to protect the collection, passed by the state Senate on 11 June, currently awaits a vote in the House of Representatives.

The emergency manager has suggested that any public outrage is premature. “To date, no one has proposed selling a single work of art,” says Bill Nowring, Orr's spokesman. “The extent to which–or even at all–the DIA and its assets will play in the overall restricting of Detroit bears further discussion.”

A small number of art lovers have come out in support of a sale. “Art will survive. The pensioner will not,” the New Yorker art critic Peter Schjeldahl wrote in a recent web posting. “I do not view the impending decision as a close call.”

For some museum professionals, however, simply discussing the monetisation of the collection is worrisome. “There was not a whiff of selling art in the depression or in the 60s,” Graham Beale, the director of DIA, said in an interview last month. “It is a modern development and it is part of the whole commodification of art hat has happened in the last 40 or 50 years.”

DIA advocates acknowledge that the uproar surrounding the museum can be a tough pill to swallow at a time when 40% of the city's streetlights are out of order, pensions are in danger and ambulances are in short supply. Nevertheless, “the collection is going to be essential to the rebuilding of Detroit,” says Ford Bell, the president of the American Alliance of Museums. “It will be a foundation on which a new Detroit can be built.”

About the Author

Jillian Postal

Jillian Postal is an associate attorney at the Law Offices of Aaron Resnick, P.A. Jillian focuses her practice on commercial litigation matters, including breach of contract and business torts, alternative dispute resolution, and intellectual property. 


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