CHICAGO - Following repeated requests from bond insurers and other creditors, Detroit has agreed to try to estimate the value of the entire collection held at the city-owned Detroit Institute of Arts museum.
Detroit's Jones Day attorney announced the effort at a bankruptcy hearing Wednesday, according to the Detroit News. Bennett reportedly told Bankruptcy Judge Steven Rhodes that the valuation was not yet finished. Bond insurers Syncora Guarantee Inc. and Financial Guaranty Insurance Corp., as well as holders of some of the city's pension certificates, say an earlier assessment by Christie's auction house severely underestimated the value of the collection. The Detroit Institute of Arts collection is at the center of the Chapter 9 case. Detroit has reached agreements with its major labor creditors based on an influx of cash from a so-called grand bargain that leverages the art. The $816 million bargain features donations from a group of private foundations, the state of Michigan, and the DIA. In exchange, the museum would be spun off into a separate nonprofit authority and the art would be protected from any of the city's future fiscal problems.
The actual value of the collection, considered one of the best in the country, is likely to become an issue during a summer trial over the city's plan of confirmation.
Also at the Wednesday hearing, a court-hired municipal finance expert told Rhodes she would need more time to review the city's confirmation plan.
Martha Kopacz, hired by Rhodes for an independent analysis of the feasibility of the city's bankruptcy plan, said the city and its accounting firm Ernst & Young had not turned over key documents crucial to her analysis. She said she would likely need a week or so more than her current June 24 deadline, according to the Detroit News.
Rhodes ordered the parties to meet to try to reach an agreement.