Bankruptcy Judge Steven Rhodes ruled Thursday that Detroit's major creditors will not be allowed to remove artwork from the Detroit Institute of Arts in order to have it appraised.
The ruling is a blow to major bond insurers Syncora and Financial Guaranty Insurance Co. — who could collectively lose more than $1 billion in Detroit's bankruptcy. They want the city-owned artwork sold.
The DIA's attorney Arthur O'Reilly argued that removing the artworks could possibly cause damage. "All of that movement creates potential for risk. ... The very best way to keep art safe is to leave it in place," O'Reilly argued.
At the center of Thursday's proceedings was the creditors' view that the DIA's art has been undervalued in Detroit's reorganization plans. The $816-million, art-for-pensions "grand bargain" that would take funds from charitable foundations, the DIA and the state to help pay pensions while safegaurding DIA art from being sold is unfair, contend the creditors.
"We were hopeful that the City would cooperate fully with the four parties that expressed interest in entering into transactions that would fully monetize the Art," Financial Guaranty Insurance Co. said in a statement. "We maintain that the drastically undervalued DIA Settlement under the 'Grand Bargain' places politics over the financial and legal realities of the situation and will almost certainly result in drawn-out litigation that no one wants."