In the proposed 'grand bargain,' $816 million would protect DIA masterpieces from being sold. (Daniel Mears / The Detroit News)
Detroit — The city’s bankruptcy team is trying to put a price tag on the entire Detroit Institute of Arts collection following demands from various creditors.
City bankruptcy lawyer Bruce Bennett disclosed the ongoing valuation during a bankruptcy hearing Wednesday. He provided no details but said the valuation is not finished.
A group of creditors, led by Financial Guaranty Insurance Company, is trying to prove the DIA’s collection is worth more than $816 million, the amount pledged in the “grand bargain” to swap the art for aid to 32,000 city pensioners.
Any new price tag is expected to play a role in a July trial during which U.S. Bankruptcy Judge Steven Rhodes will decide whether to approve the city’s debt-cutting plan.
Christie’s Appraisals last year valued about 1,741 city-purchased pieces of art at between $454 million and $867 million.
But the New York City-based auction house was not allowed to remove paintings from the museum’s walls to inspect the back of art, museum attorney Arthur O’Reilly said.
Christie’s had limited access to works in storage.
DIA Director Graham Beal has said removals of art from the walls “risk damaging unique and irreplaceable works of art” and “could force the closure of large portions of the museum for extended periods.”
FGIC, which faces losses of up to $1.1 billion in Detroit’s bankruptcy, made a global solicitation of bids earlier seeking investors interested in buying city-owned art or loaning the city money against the massive collection.
The preliminary bids ranged from $895 million to buy 116 unnamed artworks to a $2 billion loan that would require the entire 66,000-piece collection to be held as collateral.
DIA officials declined comment Wednesday afternoon.
But in a 30-page filing with the bankruptcy court Tuesday, museum attorneys argued that most of the collection’s roughly 66,000 objects, of which only 5,000 are on display, were either donated or purchased with monetary gifts that often came with restrictions.
The 1,741 objects Christie’s appraised were all bought with city of Detroit funds, a practice that ended by 1955.
In the filing, DIA lawyers noted: “Some important gifts had express detailed restrictions on their use and transferability.”
The museum would act to prevent any sale by the city, the document added, noting that this would result in litigation which “would likely take years to resolve. Donors and heirs also would challenge any purchaser’s right to continue to retain transferred objects. The City would have to spend substantial time and resources in litigation whose likely outcome is uncertain at best.”
Michael Hodges contributed.