After months of bitter fighting over the so-called Grand Bargain to infuse the Detroit bankruptcy with hundreds of millions of dollars from (among others) the State of Michigan, the Community Foundation for Southeast Michigan, the Kresge Foundation, the Ford Foundation, the John S. and James L. Knight Foundation, the William Davidson Foundation, the Fred A. and Barbara M. Erb Family Foundation, the Hudson-Webber Foundation, the McGregor Fund, and the Charles Stewart Mott Foundation to keep the collection of the Detroit Institute of Arts out of discussion for any sale or use as collateral, the Grand Bargain’s fiercest opponent has announced an agreement with the city and the withdrawal of its opposition to the plan of adjustment. This does not completely put an end to discussion about the role of the DIA collection, but for all intents and purposes it will likely be the last of any proposal to collateralize or sell the artwork. The episode also provides a lesson to practitioners about the cost of overzealousness.
Topics: the Ford Foundation, Chapter 9, the Fred A. and Barbara M. Erb Family Foundation, Syncora Capital, the Hudson-Webber Foundation, the John S. and James L. Knight Foundation, the William Davidson Foundation, Financial Guaranty Insurance Co., Judge Rhodes, Christie's, valuation, Appraisal, Detroit, the McGregor Fund, Eugene Driker, Detroit Institute of Arts, Bankruptcy, Gerald Rosen, the Kresge Foundation, the Charles Stewart Mott Foundation, eligibility, Detroit Bankruptcy, the Community Foundation for Southeast Michigan, grand bargain
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.
Topics: Deaccession, Syncora Capital, Kate Wells, Detroit Institute of Arts, DIA, Detroit Bankruptcy, grand bargain
I'm pleased to announce that Sullivan & Worcester LLP has signed on as a Friend of Art Law Day at the annual conference of the Appraisers Association of America. The schedule has recently been released and registration is now available. Held once against at New York University Kimmel Center, this year’s event will be held on Friday November 7, 2014. The schedule is below and promises to be a fascinating day. Hope to see you there!
Topics: The Changing Laws for the Sale of Endangered Speci, Monica Kreshik, NYU SCPS, International Director of Restitution, The Frick Collection, miGavel Auctions/Lark Mason Associates, Pollock-Krasner Foundation, Betty Krulik Fine Art Limited, Michael McCullough, Pearlstein & McCullough LLP, authentication, IRS/Tax Free Exchange, Richard Levin, New York University, American Alliance of Museums, Suzanne Goldstein Baker, U.S. Fish & Wildlife Service, Cravath Swaine & Moore LLP, Art Law Day, Department of Environmental Conservation, Ulf Biscof, New Legislation for Authentication Experts, Baker Tilly Virchow Krause LLP, Christie's, Detroit Institute of Arts, Amy Goldrich, Betty Krulik, Restitution, Randi Schuster, Events, Christopher Marinello Art Recovery International L, Cahill Partners LLP, Elizabeth von Habsburg Winston Art Group, Monica Dugot, Appraisers Association of America, Marianne Rosenberg, Terry Shtob, Ford W. Bell, Craig Hoover, Bankruptcy and the Detroit Institute of Arts, Lark Mason, Kimmel Center, Wildlife Trade and Conservation Branch, Detroit Bankruptcy, Diane Wierbicki, Investment Property Exchange Services, Samuel Sachs II, Biscof & Paetow Rechtsanwälte, Withers Bergman LLP, Judith Bresler, Paul Rosenberg
Weeks after the city of Detroit released its valuation expert report on the value of the full collection of the Detroit Institute of Arts by Artvest Partners, creditors opposed to the city’s plan of adjustment and the “Grand Bargain” within it have released their own appraisal. Not surprisingly, it asserts a significantly higher value of roughly $8.5 billion, more than double the estimate in the city’s report. New York’s Victor Wiener Associates (VWA) has apparently compiled a 50-page appraisal on behalf of Financial Guaranty Insurance Company (the Detroit News and Detroit Free Press have received copies, none are publicly available of which I’m aware).
Topics: Victor Wiener Associates, Detroit News, Detroit Institute of Arts, Bankruptcy, Artvest Partners, Detroit Free Press, Financial Guaranty Insurance Company, Detroit Bankruptcy, grand bargain
A report by an expert witness designated by the City of Detroit for the upcoming bankruptcy trial has been released concerning the value of the full collection of the Detroit Institute of Arts. The report puts the full collection value at $2.7 to $4.6 billion, but estimates that the price it would fetch if the collection were actually liquidated in the real world would be closer to $1.1 to $1.8 billon, and possibly as little as $850 because of the notoriety that would accompany such a sale. It also supplements an earlier appraisal performed by Christie’s of the most significant objects in the collection.
Topics: Artvest Partners LLC, Mark Stryker, State of Michigan, Michael Plummer, Judge Rhodes, Christie's, Detroit Institute of Arts, City of Detroit, Detroit Free Press, Detroit Bankruptcy, grand bargain
Reflecting on the recent argument by the Detroit Institute of Arts that the city of Detroit cannot legally sell, let alone be forced to sell, the artwork in the museum to satisfy creditor, some overlapping terminology creates the possibility of an important confusion. Particularly in the realm of deaccessioning, this distinctions are quite important. Meanwhile, the state of Michigan today approved its part of the “Grand Bargain” to subsidize the bankruptcy to avoid sale or encumbrance of the artwork.
Topics: Donn Zaretsky, Roberta Smith, Rose Art Museum, Lee Rosenbaum, Columbia University, Deaccessioning, Detroit Institute of Arts, Isabella Stewart Gardner Museum, Association of Art Museum Directors, Michigan, Albright-Knox Gallery, New York Times, Detroit Bankruptcy, AAMD, Edward Hopper, Pennsylvania Academy of Fine Arts, grand bargain, Brandeis University, Barnes Foundation
After Judge Rhodes denied (as predicted) the expansive relief requested by creditors in the Detroit bankruptcy to perform a top-to-bottom appraisal of the collection of the Detroit Institute of Arts, attention has focused on those creditors’ objection to the “grand bargain” within the overall plan of adjustment. The creditors (and some academics) have argued that the grand bargain is a “preferential transfer,” that it puts some creditors (pension holders) in a better position than other creditors (lenders, in particular) in violation of bankruptcy principles.
Topics: Old Master, Deaccession, the Ford Foundation, Mark Stryker, Chapter 9, the Fred A. and Barbara M. Erb Family Foundation, the Hudson-Webber Foundation, 11 U.S.C. § 904, Impressionism, Amedeo Modigliani, Michelangelo, the John S. and James L. Knight Foundation, the William Davidson Foundation, Judge Rhodes, Christie's, valuation, Scheme for the Decoration of the Ceiling of the Si, Appraisal, Modernist Art, Detroit, the McGregor Fund, Eugene Driker, Detroit Institute of Arts, Bankruptcy, Gerald Rosen, the Kresge Foundation, the Charles Stewart Mott Foundation, Detroit Emergency Manager, Kevyn Orr, Detroit Free Press, eligibility, Detroit Bankruptcy, the Community Foundation for Southeast Michigan
Since reports last month that a grand bargain had been struck to provide an infusion of cash to the Detroit bankruptcy in exchange for conveying the artwork at the Detroit Institute of Arts back to the museum itself, it has been largely accepted that the deal would succeed. The deal would contribute $366 million from several foundations, $100 million from the DIA foundation, and $350 million from the State of Michigan. This air of inevitability is due in large part to the cards that Emergency Manager Kevyn Orr holds: unless Detroit wants to monetize or sell the DIA collection that the city owns, creditors cannot compel the city to do so. This in turn is for factors unique to Chapter 9 bankruptcy, as discussed here previously.
Topics: Poly International Auction Co. Ltd, Deaccession, Chapter 9, Emergency Manager, Art Capital Group LLC, Judge Rhodes, Christie's, Detroit Institute of Arts, Yuan Management Hong Kong Limited, Catalyst Acquisitions LLC, DIA, Marc Bell Partners, Kevyn Orr, DIA collection, Detroit Bankruptcy
As we predicted when it was filed, Judge Rhodes of the U.S. Bankruptcy Court for the Eastern District of Michigan denied today several creditors’ motion to appoint an independent commission to appraise the collection of the Detroit Institute of Arts (owned by the city of Detroit) as part of the city’s ongoing bankruptcy.
Topics: Governor Rick Snyder, Judge Rhodes, Christie's, Detroit Institute of Arts, Bankruptcy Code, Michigan, Emergency Manager Kevyn Orr, Detroit Bankruptcy
Detroit Emergency Manager Kevyn Orr’s plan to monetize the collection of the Detroit Institute of Arts, whether by sale or otherwise, took a large step towards realization today when at least nine local and national foundations pledged up to $330 million to Detroit to keep the collection of the Detroit Institute of Arts safe from sale, loan, or other encumbrance, and also to shore up pension funds Following the release of Christie’s appraisal report, and weeks of rumors that a “grand bargain” was in the works to raise money in exchange for keeping DIA’s art collection out of any plan of adjustment for the city’s bankruptcy, the Detroit Free Press reports today that federal mediator and U.S. District Court Judge Gerald Rosen released a statement outlining the pledge. The foundations identified are the Community Foundation for Southeast Michigan, the Kresge Foundation, the Ford Foundation, the John S. and James L. Knight Foundation, the William Davidson Foundation, the Fred A. and Barbara M. Erb Family Foundation, the Hudson-Webber Foundation, the McGregor Fund and the Charles Stewart Mott Foundation.
Topics: Old Master, the Ford Foundation, Mark Stryker, Chapter 9, the Fred A. and Barbara M. Erb Family Foundation, the Hudson-Webber Foundation, 11 U.S.C. § 904, Impressionism, Amedeo Modigliani, Michelangelo, the John S. and James L. Knight Foundation, the William Davidson Foundation, Judge Rhodes, Christie's, valuation, Scheme for the Decoration of the Ceiling of the Si, Appraisal, Modernist Art, Detroit, the McGregor Fund, Eugene Driker, Detroit Institute of Arts, Bankruptcy, Gerald Rosen, the Kresge Foundation, the Charles Stewart Mott Foundation, Detroit Emergency Manager, Kevyn Orr, Detroit Free Press, eligibility, Detroit Bankruptcy, the Community Foundation for Southeast Michigan
