Detroit Bankruptcy and the DIA

With the city of Detroit officially filing for bankruptcy last week, the Detroit Institute of Arts collection just became more vulnerable. A New York Times article details some of the problems and potential for loss of the collection as Detroit works its way through the bankruptcy courts and preliminary filings.

The article notes most museum collections are owned by non profit corporations in trust for the public, but the DIA is actually owned by the city of Detroit, which is what appears to put the collection in jeopardy of potential liquidation and sale.

The NY Times reports

Last month, after the first rumblings that creditors were pressing the issue of the collection as an asset, Bill Schuette, Michigan’s attorney general, issued a forcefully worded opinion saying that the artworks — under the state’s trust law and other laws — were “held in trust for the public” and could be sold only for the purpose of acquiring additional art, not for satisfying municipal debts. He added that in decades of financial turmoil in Detroit, “at no time have the people demanded their most precious cultural resources be sold in order to satisfy financial obligations.”

Under federal bankruptcy proceedings, however, it is unclear what force that opinion would have. Even the question of what would happen if the city decided to sell the art is difficult to answer — whether, for example, the museum would appeal to the bankruptcy judge or would be able to go to another court to try to prevent it. Museum officials say the sale of even a part of an institution’s core collection in effect renders a museum defunct: donors stop giving money and art, attendance declines and other support dries up.

(The Detroit Institute of Arts’ annual attendance is nearly 600,000. Last year three Michigan counties agreed to institute a property tax increase earmarked for the museum, putting it on a secure financial footing for the first time in decades.)

Politically, and perhaps as a negotiating tactic, the question of the collection’s fate is being cast as a choice between measurable benefits, like city pensions, which could be cut to satisfy creditors, and the much harder-to-measure benefits of cultural assets.

“It’s hard to go to a pensioner on a fixed income and say ‘We’re going to cut 20 percent of your income or 30 percent or whatever the number is, but art is eternal,’ ” Mr. Nowling said. “For people, that’s a hard distinction. I think it’s a distinction that some of the patrons of the D.I.A. have a hard time understanding. We’re talking about real people here with real decisions that have real impact on their lives.”

He added, of the art works: “It doesn’t mean we’re proposing to sell them. But we need to know how much they’re worth and we need to know what value are they bringing back to the city.”

Source: The NY Times