Christie International PLC will appraise the collection of the Detroit Institute of Arts, estimated to be worth more than $1 billion, in response to creditors demanding a valuation of the insolvent city’s assets, emergency manager Kevyn Orr said.
While the city, which filed the largest U.S. municipal bankruptcy on July 18, has no plan to sell the museum’s art, the assessment by the auction house is “an integral part of the restructuring process” to shed $11.5 billion in unsecured debt and improve services, Emergency Manager Kevyn Orr said in a statement.
“The city must know the current value of all its assets, including the city-owned collection at the DIA,” Orr said. Christie’s also will advise Detroit on “non-sale alternatives” for the art works, which include works by Vincent Van Gogh and Pieter Bruegel the Elder.
“We understand that a valuation of all the city’s assets (extending well beyond the art) is one of many steps that will be necessary for the legal system to reach a conclusion about the best long term solution for the citizens of Detroit,” the auction house’s Christie’s Appraisals Inc. unit said in a statement released in New York yesterday.
The possibility that some of the 128-year-old art museum’s collection of 60,000 items might be sold to pay creditors arose in May when Orr told the institute it may be vulnerable in a bankruptcy proceeding.
While the institute is operated by an independent, nonprofit organization, the city owns the property and much of the art works. The fate of the collection may be decided by U.S. Bankruptcy Judge Steven Rhodes, who is handling the Detroit case.
“Our goal is to preserve the value of all the city’s assets and make sure they are rationalized in a way that value can be returned to its citizens and, in certain cases, enjoyed by the Detroit metro area’s residents for many years to come,” Orr said in the statement Monday.
Art experts have expressed alarm over the adverse impact on the global market from a mass sale of the Detroit museum’s collection, which includes Van Gogh’s “Portrait of Postman Roulin, ‘‘The Wedding Dance" by Bruegel and ‘‘Madonna and Child’’ by Giovanni Bellini, each of which could fetch more than $150 million.
Among the museum’s renowned masterpieces is Diego Rivera’s 27-panel fresco ‘‘Detroit Industry,’’ which surrounds a garden court and is a tribute to the city’s labor force of the 1930s.
Orr has hired other consultants to appraise the value of other municipal assets, such as real estate, parking garages, the Detroit-Windsor tunnel and the city-owned airport. They will also advise Detroit on ways to create value form the assets without transferring ownership, Orr said.
The notion of a fire sale of Detroit’s art ignited public outcry and prompted Michigan Attorney General Bill Schuette to issue a ruling that the collection is held by a public trust and cannot be sold to satisfy creditors. However, Schuette’s ruling may have no effect in bankruptcy court.
A property tax levied in the three counties surrounding Detroit generates $23 million for the art institute, which amounts to three-fourths of its operating budget, according to the museum.
The museum will cooperate with the appraisal, though there is no reason for it, Detroit Institute of Arts said in a statement.
‘‘The Attorney General has made clear that the art is held in charitable trust and cannot be sold as part of a bankruptcy proceeding,” the statement said. “We applaud the EM’s focus on rebuilding the City, but would point out that he undercuts that core goal by jeopardizing Detroit’s most important cultural institution.”
An art sale also would jeopardize the local tax and would violate the trust of donors and supporters, the institute said.
© Copyright 2024 Bloomberg News. All rights reserved.