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A federal bankruptcy judge in Detroit has mediated a deal that could potentially solve two of the city's biggest problems. The plan would raise money for retirees' pension funds and keep masterpieces from the Detroit Institute of Art from being auctioned off. NPR's Elizabeth Blair reports.
ELIZABETH BLAIR, BYLINE: As part of bankruptcy, all assets are on the table. And the Detroit Institute of Art holds what many consider to be the city's most valuable assets, paintings by Rembrandt, Monet, Van Gogh and Matisse, among others. Christie's valued select works in the museum between about 400 and $800 million. City officials suggested those paintings be sold to pay off creditors. That led to an outcry throughout the city and the arts world in general.
Judge Gerald Rosen has been mediating the complicated and sometimes tense bankruptcy proceedings. He came up with a plan that he presented to a number of private donors and foundations, including the Knight Foundation, where Alberto Ibarguen is president.
ALBERTO IBARGUEN: The suggestion was, well, what if we had an additional pool of money that could buy the art, put it in trust, so that it stays as a cultural asset of Detroit and the state of Michigan?
BLAIR: And money from that trust would also be used for retirees' underfunded pensions. How? There are still a lot of details to work out but today, nine local and national foundations agreed to the concept and pledged more than $330 million. They include Ford, Kresge and Knight. Foundations don't usually come together like this to help solve municipal problems, not to mention buy art for a museum. John Gallagher, a business reporter for the Detroit Free Press, says today's announcement is good news for the city but it doesn't settle the bankruptcy case.
JOHN GALLAGHER: The bankruptcy case is still alive. Creditors are still trying to get every penny they can. It helps. I mean, suddenly we have an extra $330 million in the pot that wasn't there yesterday.
BLAIR: The Community Foundation of Southeast Michigan set up a fund to support these twin goals. It's called the Fund to Support Detroit's Retirees, Cultural Heritage, and Revitalization. Elizabeth Blair, NPR News. Transcript provided by NPR, Copyright NPR.