Monday, 27 May 2013

Detroit Institute of Arts for sale?

The Wedding Dance
Picture: DIA
Alarming news via AHN that Detroit's art museum might be sold off to pay city debt, because the City of Detroit itself owns the museum.  Detroit's financial position is dire, and if it seeks bankruptcy protection it might have no choice but to sell works from the museum to satisfy creditors.  It seems unlikely that the museum as a whole will be sold.  I understand that there are legal defenses around amenity value that the City could use to defend it from creditors, and there will be restrictive covenants around gifts to the collection.  I see two more likely scenarios.

First, the City might rent out the collection.  Unfortunately the precedent is well-established that art can be dragged around the world for regular money-making tours without regard for the fragility of unique works of art.  Maybe legal arguments about ownership could be side-stepped by sending the collection on tour for a few years, or even leasing for decades to a new museum in the Middle East or Asia.  This is probably the worst possible outcome.  The city will still be deprived of its art, and we all lose when irreplaceable masterpieces are battered and bruised from their peregrinations.  Detroit has an empty museum building to maintain, and the threat of future sale or further loans will always deter future donors.  It may also start a trend of every hard-up municipality boarding up its museum and renting out the collection.

Second, more limited sales might take place.  The works bought by the City of Detroit are at greatest risk of sale.  Ownership is least at risk of dispute in these cases, and they will not be subject to restrictive covenants.  I've listed the key works at risk below, which includes maybe their greatest picture - Bruegel's Wedding Dance.  

The third possibility - total or near total sale - seems unlikely, but it's not impossible.  It would be a tragedy for Detroit and a terrible precedent - but in my view less harmful than renting out the collection.  It's potentially a boon to the art market, but marketing so many great works at once will be a challenge.  Perhaps a couple of buyers could be offered billion-dollar job lots - Doha, maybe Carlos Slim and a couple of other plutocrats.  Detroit's bonds are trading at around 91 cents on the dollar, so maybe Doha could buy up cheap bonds and offer them back to the City in return for art - a cost-effective way of buying.

Potential donors will now be nervous of funding the DIA because their donations might just subsidise the city's creditors.  The best scenario is that the City applies now to transfer the museum to independent trustees - a more common form of museum governance, and one that would protect the museum and benefit the city.  Given Detroit's financial situation, that could be regarded as a 'gratuitous alienation', unfairly depriving creditors of their due.  A court decision should therefore be sought to agree to the asset transfer now, ahead of any potential future claims.

What's for sale?
The collection is strong in Dutch art (including Rembrandt's Visitation and Ruisdael's Jewish Cemetery), nineteenth century French art (excellent Degas, Van Gogh and Cezanne) and early Italian art (Sassetta, Fra Angelico), and it has an outstanding collection of European sculpture (including Pollaiuolo's Judith).  But  most of the collection was acquired by donation, bequest or from donated funds.  These works, including the valuable impressionist and post-impressionist masterpieces, might not therefore be alienable.  

The following works were bought by the City and are most at risk of sale.  The Bruegel is most important, despite being rather extensively restored.  Together with more minor works bought by the City, and any other works that might not be encumbered with restrictive covenants, it could raise as little as $250-500m.  That's not an enormous amount of money in context of Detroit's debt, so maybe it won't be worth the court costs and public opprobrium that would arise from attempting to flog them.

Bruegel the Elder Wedding Dance
Van Eyck St Jerome (not really a Van Eyck - but a good picture, sometimes attributed to Petrus Christus.  Last early Netherlandish painting of this importance on market was probably Bouts Resurrection in 1980)
Chardin Dead Hare

Luca della Robbia Madonna and Child

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