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September 19, 2014

Detroit Museum: Suit in Offing if Bankruptcy Plan Is Rejected

Testifying Thursday in Detroit's bankruptcy trial, a Detroit Institute of Arts executive said the museum will go to court to prevent the sale of its holdings if the city's restructuring plan is not approved, Reuters reports. The plan incorporates the state- and foundation-funded "grand bargain" aimed at shielding the institute's works from being sold to pay off creditors.

If U.S. Bankruptcy Court Judge Steven Rhodes rejects the city's blueprint, "we would be in litigation to protect the collection," said Annmarie Erickson said, the museum's chief operating officer. One major creditor, Financial Guarantee Insurance Co., has sought in court to paint the museum and its works as valuable assets Detroit could liquidate in bankruptcy.

Questioning witnesses Thursday, the judge signaled that he viewed the museum's value not just in dollar terms but through its role in the city's ability to retain residents and attract investment, the Detroit Free Press writes.