The city of Detroit is home to the Detroit Institute of Arts, one of the world’s great art museums. Its collection is worth about $2-billion. The city of Detroit is also bankrupt, and the pension and health plans of its present and former employees are insolvent. Their rights and well-being are ultimately more important than any particular collection of works of art.
A group of creditors, led by Financial Guaranty Insurance Co., has offered to buy the museum’s artworks for nearly $2-billion (U.S.). Other prospective purchasers are offering similar sums. The city government is trying to raise $816-million from various sources, including foundations and the taxpayers of the state of Michigan. The city plan would keep the art in the Institute of Arts. But selling off the art would raise at least $1-billion more.
The city says the creditors cannot compel the sale of the artworks, and that may be true, though American bankruptcy law does not give a simple answer. But this isn’t really a legal question. It’s a financial and moral one. How much should current and former employees of the city have to suffer? Municipal employees are not like bondholders, who will be taking a haircut. They’re not commercial risk-takers. They should have a strong priority on any assets that can help to fund their liabilities. Their pension plan has a shortfall of $3.5-billion; their health plan is unfunded. As things now stand, many of them could end up being pushed below the U.S. poverty line.
The works of art in question – by Caravaggio, Bruegel, Rembrandt, Cézanne, Van Gogh, Matisse, Picasso, Francis Bacon, Warhol and many others, not to mention Chinese and Islamic works – will no doubt mostly leave Detroit after a sale. But they won’t disappear. They’ll end up in private collections and public museums across America and around the world. For a city facing difficult choices, selling is the least bad option.Report Typo/Error