A group of creditors took the first formal legal filing to a Michigan bankruptcy court advocating for an expedited process in evaluating and selling the artworks held by the Detroit Institute of Arts, the Detroit Free Press reported.
Following the Motor City’s announcement of bankruptcy, the city’s emergency manager, Kevyn Orr, contacted Christie’s auction house in order to glean the value of the work in the museum. But, in the wake of a record-breaking auction at Christie's, the city’s largest creditors in the chapter 9-bankruptcy case allege the current process of evaluation of the artwork does not suit the speed nor transparency at which Detroit’s creditors need be remunerated.
In a legal document filed November 26, the group of creditors say that Detroit’s inability to raise public funds rests in extraordinary circumstances, now that the city has proven unable to sustain itself in a typical manner. The document reads, in part:
Generally, a municipal debtor’s most valuable “asset” is its ability to raise taxes, as municipalities rarely own tangible, non- essential assets. The City, however, has the Art, a valuable asset (speculated to be worth billions of dollars) that is not connected with the delivery of any core services the City provides to ensure the health, safety and welfare of its citizens. Accordingly, the “best interests of creditors” requirement dictates that the City must demonstrate that its plan maximizes the value of the Art to enhance creditor recoveries. The only way to prove this is to provide an assessment of the Art based on arms-length market transactions, against which creditors and the Court can compare the City’s plan’s proposed treatment of the Art (or any proceeds of a transaction that monetizes the Art).
The creditors are searching for a speculated billion-dollar-plus valuation of the DIA’s holdings. Art critics have waffled on the idea of liquidating Detroit’s art holdings, including the New Yorker’s Peter Schjeldahl. Though it is a frighteningly sad prospect, the “best interest of the creditors” seems to push this option for fiscal recovery into reality.
[via Detroit Free Press]