Opening statements concluded in the Detroit Bankruptcy trial yesterday, and as expected, the role of the art at the Detroit Institute of Arts played a central role. Although opening statements constitute nothing of evidentiary value, they obviously show the road map that the various sides intend to follow. Thanks to courtroom reporting, we have a number of clues about the themes that the lawyers intend to develop.
Not surprisingly, Detroit’s lawyer stressed the value of the Grand Bargain. This fits well with the coordinated strategy of the city and the museum itself to argue, in effect, that the Grand Bargain is a windfall that would otherwise be unavailable, because the art is either held in trust, restricted property, or encumbered in some other way. And, regardless of the technical constraints, that as the city emerges from bankruptcy, its people have a "right to t and culture."
Creditor Syncora Capital took the lead in attacking the plan of adjustment and the Grand Bargain’s inclusion in it. Most importantly, it argued that the Grand Bargain was the only option that the city ever considered, which is not enough for approval. More inflammatorily, according to reporter Kate Wells, Syncora argued that even if Detroit can’t be forced to sell the art, it should. Even more controversially, Syncora apparently claimed that the collection is so valuable, the city should sell it and just defend whatever litigation followed over the property restrictions.
This last claim obviously got lots of attention, but from here it is a not terribly surprisingly tactic to make the first argument seem more reasonable. Lest anyone dismiss it out of hand, this has been the large creditors’ approach with the DIA collection for some time: to throw out there a possible use of the collection in service of their real point, which is that the plan of adjustment is inadequate and should be redone.
Expect this to get very interesting in the weeks ahead.
