The Detroit Institute of Arts: Goose or Golden Egg?

You cannot escape the irony that the name of the labor lawyer who wants to lay his hands on the $2-Billion collection of the Detroit Institute of Arts (DIA) is Michael Artz. Mr. Artz represents the bankrupt Motor City’s largest union, the American Federation of State, County and Municipal Employees. He can’t be pleased with U.S. Bankruptcy Judge Steven W. Rhodes’ ruling that “pension benefits are a contractual right and are not entitled to any heightened protection in a municipal bankruptcy.”

According the the Detroit News, Judge Rhodes stated that selling DIA masterpieces does not address long-term financial and structural problems, and therefore would make no sense. Further, the judge said, “When the expenses of an enterprise exceeds its revenue, a one-time infusion of cash, whether from an asset sale or borrowing, only delays inevitable financial failure unless the enterprise reduces expenses or enhances income,”

Residents of counties surrounding Detroit also pay taxes to support the museum. The judge’s opinion was welcome news to museum supporters. “Oakland County and the entire region have a vested interest in protecting our art,” said Oakland County Treasurer Andy Meisner. “Judge Rhodes’ statement is a clear indication that the sale of this world-class art collection has no long-term financial benefit for the city.”

Further information:
Orr: Combined value of DIA’s most valuable art less than $2B, can’t fix shortfalls [Detroit News; Dec 3, 2013]
Detroit Ruling on Bankruptcy Lifts Pension Protections [New York Times; Dec 3, 2013]

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