May 27, 2014 at 9:46 pm

DIA: Detroit barred by own laws from selling art

The Detroit Institute of Arts filed its response Wednesday to creditors who’ve argued the deal to soften cuts to pensioners in exchange for protecting city-owned art should be junked in favor of selling off all or part of the museum’s collection.

Citing a blizzard of state and federal court rulings, the DIA’s 30-page legal filing with U.S. bankruptcy Judge Steven W. Rhodes argued the city is prohibited by its own laws and the 1885 state charter creating the museum from using DIA property for anything other than “art purposes.”

Some creditors led by the Bermuda-based bond insurer Syncora have argued a sale would yield more cash for banks and pensioners alike than the $816 million over 20 years contemplated in the so-called “grand bargain.”

The DIA filing also noted any attempt to sell art — particularly works that were donated, not bought with city money — would result in lawsuits that could cost the beleaguered city “substantial time and resources in litigation whose likely outcome is uncertain at best.”

MHodges@detroitnews.com
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