Free Press: DIA On Board With 'Grand Bargain' To Shield Creditor Targets

December 11, 2013, 3:32 PM

Though details still are being discussed, Detroit Institute of Arts leaders like the idea of a wide-ranging deal addressing two top-tier concerns in Detroit's bankruptcy case.

Noel Night statement last Saturday by the Detroit Light Brigade. (Photo by Carrie Addis)

Mark Stryker of the Free Press follows up on a story his paper broke last Wednesday:

The Detroit Institute of Arts confirmed today that it has signed on to a potential grand bargain brokered by a federal mediator that would protect its art from creditors in Detroit’s bankruptcy, bolster at-risk municipal pensions and grant the museum its independence from city ownership.

The Free Press reported last week that the museum had entered into talks with U.S. Chief District Judge Gerald Rosen. But today’s announcement is a key step toward a solution to two of the most controversial issues facing the city in in bankruptcy — the fate of the DIA and city-worker pensions.

Rosen is pushing at least 10 national and local charitable foundations to funnel some $500 million into pensions on behalf of the museum, removing its irreplaceable art work from possible sale to satisfy city debts and creating new nonprofit DIA separate from the control of either the city or the foundations. 

The DIA posts a five-sentence statement on the discussions here, saying:

At a meeting with the mediators on Tuesday, the DIA expressed enthusiastic support for the work that has been done to date, and pledged to help refine and implement the plan.

Sizable hurdles remain, Stryker cautions.

The foundations, which include some of the country’s largest and most influential such as the New York-based Ford Foundation, still have to agree that supporting municipal pensions is consistent with their mission. It also remains unclear whether the unions representing pensioners will also drop their demands for more money and accept the pot created by the foundations. . . .

The plan will have to be confirmed by U.S. Bankruptcy Judge Steven Rhodes and is likely to be contested by creditors looking to sell DIA art as a way of recovering more of the money owed to them by the city.

Earlier in Deadline Detroit:

Free Press: Grand Bargain In The Works To Spin Off DIA And Reduce Pension Damage, Dec. 4 

Read more:  Detroit Free Press

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