The Detroit Institute of Arts has agreed to join a possible grand bargain overseen by a federal mediator that would protect the museum’s collection from Detroit’s creditors, the Detroit Free Press reports.
U.S. Chief District Judge Gerald Rosen “is pushing at least 10 national and local charitable foundations to funnel some $500 million into pensions on behalf of the museum, removing its irreplaceable art work from possible sale to satisfy city debts and creating new nonprofit DIA separate from the control of either the city or the foundations.” Christie’s auction house recently appraised the DIA’s collection at between $450 million and $866 million. Detroit’s debt is estimated at around $18 billion, several billion of which comes from unpaid pensions.
The 10 organizations in talks with Judge Rosen are located across the country, including New York’s Ford Foundation, though many of them are based in Michigan. Detroit filed for Chapter 9 bankruptcy in July, the largest American city in history to do so. Last week, a federal judge announced that the city could formally enter bankruptcy, and that public employee pensions were “a contractual right and are not entitled to any heightened protection in a municipal bankruptcy.”