Detroit Art Valued at Up to $4.6 Billion / New Value Is Sharp Increase Over Previous Estimate and Could Cause Problems for City in Bankruptcy Court

Source: Matthew Dolan, Wall Street Journal, July 9, 2014

A new report on Detroit’s fine-art collection has pegged its entire value at $2.8 billion to $4.6 billion, a sharp increase over a previous partial estimate that could create a headache for the city in bankruptcy court. Some creditors are pushing Detroit to sell or lease select works from the 66,000-piece, world-class art collection at the Detroit Institute of Arts as part of the settlement of nation’s largest-ever municipal bankruptcy. The new, all-inclusive valuation released Wednesday by New York-based Artvest Partners could add fuel to their arguments ahead of the bankruptcy trial set to begin next month.
Related:
DIA seeks to block removal of artworks for valuation in bankruptcy fight
Source: Nathan Bomey, Detroit Free Press, May 13, 2014

The Detroit Institute of Arts late tonight asked a judge to block creditors from physically removing thousands of works from the museum’s walls to determine their value in the city’s Chapter 9 bankruptcy. DIA attorneys filed an official objection to the proposal by Financial Guaranty Insurance Co. (FGIC) and Syncora. The major bond insurers — which could collectively lose more than $1 billion on Detroit’s bankruptcy — are leading a push to force the city to cooperate with four prospective outside bidders for the entire museum or portions of its collection. The insurers have asked Judge Steven Rhodes to approve their motion allowing their representatives to physically remove as many as 12,000 works from the walls and archives, snapping digital pictures of the front and back of each piece….

GM, Ford, Chrysler may give millions to DIA in Detroit bankruptcy deal
Source: Nathan Bomey, Alisa Priddle, Brent Snavely and Tom Walsh, Detroit Free Press, May 13, 2014

The Detroit Three automakers are considering giving tens of millions of dollars to the Detroit Institute of Arts toward its $100-million obligation to help reduce pension cuts and protect art from being sold in the city’s bankruptcy, the Free Press has learned. The DIA approached the auto companies about six weeks ago to ask them to contribute more than $50 million as a group, one person familiar with the talks said. The total donation for the three may end up closer to half that amount, said the source. But once the automakers are on board, the museum might make similar requests to automotive suppliers. The DIA also asked for help from several non-auto foundations, including the Los Angeles-based Getty Foundation. Today it said it is mulling the request….

Detroit creditor Syncora gains access to DIA documents
Source: Matt Helms, Detroit Free Press, April 29, 2014

A Detroit creditor that’s been pushing for a sale of Detroit Institute of Arts assets to settle the city’s debts won access Monday to documents shared between the museum and Michigan’s attorney general last summer. …. The reason for Syncora’s insistence on a strategy of forcing Detroit to consider selling art is clear. The Bermuda-based holding company is on the hook for nearly a quarter-billion dollars in Detroit’s bankruptcy, in no small part because it underwrote a $1.4-billion debt deal to shore up underfunded pensions. The city is now seeking to wipe out that deal engineered in 2005 by Mayor Kwame Kilpatrick.

Foundations commit more than $330M to save Detroit art
Source: Reuters, January 13, 2014

Financial pledge also aims to fund at-risk retiree pensions. …The mediators, headed by federal judge Gerald Rosen, said the philanthropic effort for the DIA was being funneled through a leadership committee consisting of the heads of the Ford Foundation, the Kresge Foundation, the John S. And James L. Knight Foundation and the Community Foundation for Southeast Michigan….

Deal reached to fund Detroit pensions, preserve art
Source: Ned Resnikoff, MSNBC, January 14, 2014

A coalition of local and national foundations have reached a deal intended to save Detroit’s largest art collection and limit cuts to the retirement benefits of public workers. On Monday, U.S. Chief District Judge Gerald Rosen announced that he had finished mediating a deal under which the nine organizations involved in negotiations would pay $330 million into public pensions and turn the publicly-owned Detroit Institute of Arts (DIA) collection over to the private nonprofit which currently runs the museum. The plan effectively eliminates the risk that Emergency Manager Kevyn Orr would pressure the DIA into selling off some of its art as part of his plan to steer Detroit through the largest municipal bankruptcy in American history. Orr has estimated that the city faces an $18 billion long-term debt burden, including a $3.5 billion pension liability. …

$330 million pledged to save pensions, DIA artwork from Detroit bankruptcy
Source: John Gallagher and Mark Stryker, Gannett Michigan, January 13, 2014

…Rosen announced nine foundations pledged $330 million to the cause, a critical step toward solving the contentious issues surrounding pensions and paintings. The money, which represents an unprecedented coalition of foundation support for a troubled American city and a bold stroke of out-of-the-box creativity, is also a potential game changer in Detroit’s struggle to restructure $18 million in municipal debt in bankruptcy court. Despite the immediate acclaim that greeted the pledge, a myriad of challenges remain that could scuttle a deal. Leaders of the pension funds representing city workers and police and fire personnel would have to accept the terms. The $330 million, which still remains shy of Rosen’s original goal of $500 million, is unlikely to satisfy the unions. …Some creditors believe city-owned DIA artwork is worth “billions of dollars” and that a recent appraisal from Christie’s auction house that was commissioned by the city vastly under-valued the city-owned collection. Creditors have accused Christie’s of offering a low-ball figure to give political cover for mediator Rosen to propose transferring the DIA to an independent organization….

A Bruegel, a Rembrandt, a van Gogh: Appraisal Puts Prices on the Priceless in Detroit
Source: Randy Kennedy, New York Times, December 19, 2013

… Detroit’s emergency manager on Thursday released Christie’s long-awaited market appraisals for some of the greatest masterpieces in the collection of the Detroit Institute of Arts, which has become a political football in the city’s efforts to repay billions to creditors as part of a federal bankruptcy case. Pieter Bruegel the Elder’s “The Wedding Dance,” one of the institute’s calling cards and one of only five Bruegels in American museum collections, would bring $100 million to $200 million if sold, the auction house estimated. An 1887 van Gogh self-portrait — one in which he is wearing his familiar yellow straw hat and tortured mien — was valued at $80 million to $150 million. Rembrandt’s “The Visitation” would bring $50 million to $90 million. And Matisse’s “The Window,” the first painting by the artist to enter an American museum collection, would fetch $40 million to $80 million. A drawing by Michelangelo of a design for the Sistine Chapel ceiling brought the only sizable estimate for a work that was not a painting: $12 million to $20 million. While museums often have their collections valued in a blanket manner for insurance purposes, the public revelation of what its prized paintings and sculpture would bring on the market is a painful turn of events for the institute, which is facing a threat to its existence of a kind never confronted by another American museum of its size. …

Christie’s Appraises Detroit Institute Artworks
Source: New York Times, December 19, 2013

Experts at Christie’s set values on some key artworks in the collection of the Detroit Institute of Arts on Thursday. The auction house appraised about 2,800 works — less than 5 percent of the institute’s entire collection — arriving at a total valuation of between $454 million and $867 million. Below, some of the most important pieces.

‘Detroit Art City’: The story of a town on the verge of losing more than just its van Gogh
Source: PBS Newshour, Art Beat blog, December 11, 2013

“Detroit Art City: The Detroit Institute of Arts Story,” a documentary by Detroit Public Television, tells of the story of the one of America’s most significant art collections and how it’s fate came to rest in a legal battle over the Motor City’s future.

…So the museum is fighting back. The Detroit Free Press reported last week that the DIA is working to broker a deal where it would raise $500 million from nonprofit foundations in order to become a nonprofit itself. The arrangement would separate the museum from the city and generate money to assist in the bankruptcy. If the deal passes, the museum would ensure the safety of its collection from creditors. …

How NOT to sell Detroit’s Art
Source: Philip Kennicott, Washington Post, December 4, 2013

The grim and venal push to put a pricetag on the art in the Detroit Institute of Arts continues with news Tuesday that an analysis of the collection’s value — important to creditors if they can force its sale as part of the larger Detroit bankruptcy crisis—has come in lower than expected.

Orr: Combined value of DIA’s most valuable art less than $2B, can’t fix shortfalls
Source: Robert Snell, Detroit News, December 3, 2013

The combined value of the city’s most valuable art is less than $2 billion and cannot solve the city’s pension problems, Emergency Manager Kevyn Orr told The Detroit News. Hours after Detroit was ruled eligible for Chapter 9 bankruptcy relief, Orr lifted a veil of secrecy covering an ongoing valuation of parts of the collection housed at the Detroit Institute of Arts by New York-based auction house Christie’s Appraisals. The first phase, which involves valuing 496 pieces, shows the art is worth less than $2 billion, Orr said. …

Pension official: Idea of foundation funds ‘very encouraging’ in Detroit bankruptcy
Source: Robert Snell, Detroit News, November 14, 2013

Pension officials fighting attempts to cut retiree benefits were encouraged to learn Thursday that a federal mediator is investigating whether several foundations are willing to pool money that would safeguard the Detroit Institute of Arts’ city-owned collection and help bankroll retiree pensions.

A mix of reactions emerged hours after The News revealed a behind-the-scenes proposal that could play a major role in the city’s restructuring and successful emergence from Chapter 9 bankruptcy.

Orr: State aid was never on the table to forestall Detroit bankruptcy
Source: Brent Snavely, Alisa Priddle and Tresa Baldas, Detroit Free Press, October 29, 2013

The City of Detroit’s artwork — potentially worth billions — is still in play. … Orr’s testimony drove home what has been crystal clear in Detroit’s bankruptcy case: There will be no direct funding from either the state or federal level to help Detroit restructure its debt and the Detroit Institute of the Arts collection remains on the table as an asset the city could leverage to help restructure its debts. “It is valuable; I do not know if it is a potential source of cash for the city,” Orr said. … Anthony Ullman, an attorney for the Retiree Committee, asked Orr whether the city could get billions in return for the art, would that help the city restructure its debt. “Yes, I think it would,” Orr said, but he dodged questions about whether he would use it to tackle debt. In recent weeks, the discussion surrounding the DIA art has shifted from outright sales to leveraging the value of the masterpieces without relinquishing ownership. Detroit has hired Christie’s auction house to assess the value of the art and is expecting a report within the next few weeks. Michigan Attorney General Bill Schuette has issued a formal opinion stating that a forced sale of art would be illegal because the work is held in the public trust. The DIA, too, has vowed to fight any sale or any plan that puts the collection at risk. …

DIA comments at bankruptcy trial: What did they signal?
Source: Mark Stryker, Detroit Free Press, October 23, 2013

The City of Detroit’s opening statement in the bankruptcy eligibility trial that got under way this morning offered a brief and enigmatic reference to the possible sale of city-owned art housed at the Detroit Institute of Arts. …

The Agony of Suspense in Detroit / Detroit Institute of Arts Copes With Threat of Art Selloff

Source: Randy Kennedy, New York Times, October 2, 2013

It would have been hard to think of a better metaphor: A fire-breathing dragon was bearing down on the Detroit Institute of Arts. … But these days, the sense of peril surrounding this 128-year-old museum is real and unrelenting. Only a day before the protest, the institute had to close unexpectedly because of a power loss in the area caused partly by city equipment failures. Its registrars and art handlers are hauling hundreds of artworks out of storage in preparation for an appraisal now under way by Christie’s auction house, which was hired by Detroit’s emergency manager to determine how much the museum is worth as a city asset. Board members worry about a prolonged hiatus in gifts of art and money as donors wait out the bankruptcy case.