Politics

Artful Deal? NY Firm Offers Detroit $4 Billion Loan If Art Used As Collateral

August 27, 2014, 2:19 PM

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Many months into the bankruptcy, the obsession over Detroit's art collection continues.

The latest: Art Capital Group, a New York lender, has offered to loan Detroit as much as $4 billion if it's willing to use its art collection at the Detroit Institute of Art as collateral to help the city out of bankruptcy, Matthew Dolan of the Wall Street Journal reported.

"We're prepared to provide a loan, secured by the art collection, that is a balanced, fair and equitable solution for the city so that it can emerge from bankruptcy with the money it needs to secure a better future," Montieth M. Illingworth, the art-group's spokesman, said in a statement Tuesday night, the Journal reported. "Only our loan does that. The Grand Bargain doesn't."

The offer comes before the start next week of Detroit's bank trial in U.S. Bankruptcy Court in downtown Detroit and would be in place of the so called grand bargain

The art-backed loan is being touted the week before the start of Detroit's municipal bankruptcy trial as an alternative to the so-called grand bargain, which a mix of private and state funds that have been committed to save the city-owned art and ease the cuts in pensions for city workers.

The city has shown no interest in selling off the art, and on Wednesday, Bill Nowlling, a spokesman for Emergency Manager Kevyn Orr, told the Detroit News that the pensioners would lose the outside funding if they blew off the grand bargain. 

“The city is 100 percent committed to the grand bargain because it is the only way to provide $815 million to shore up pensions and protect the art. The city will not sell or leverage the art,” Nowling said Wednesday in a statement. “This latest proposal is nothing but a thinly veiled attempted by our remaining hold-out creditors to improve their recovery at the expense of the city’s pensioners and its cultural assets. The Art Capital proposal would force drastic, double-digit pension cuts and kill the $816 million for pensions from the grand bargain.

 


Read more:  Wall Street Journal


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