It’s a busy day in bankruptcy court, with Judge Steven Rhodes considering several items. I’ll post about them as they happen today.
First up was the motion by two bond insurers, who collectively stand to lose about $1 billion under the city’s current financial plans. They want to examine the Detroit Institute of Arts collection with the goal of appraising it. The bond insurers, Syncora and Financial Guaranty Insurance Company, say they have buyers for the collection and the sale of it would help offset some of the city’s debt.
Minutes after the attorneys for the bond insurers, the DIA and the city finished their arguments, The Detroit News’s Robert Snell filed this story.
Judge Rhodes will rule after lunch on the bond insurers’ motion.
The morning discussion also included Judge Rhodes asking the attorneys the same question Craig Fahle asked me this morning on our weekly segment on his show: Why does the art need to come off the wall for inspection? Like me, the attorneys couldn’t really answer that question. Here’s part of the exchange, with a bit of paraphrasing but mainly direct quotes:
Judge Rhodes: The DIA is concerned about the potential and the risk of damage to the art (if it’s taken off the wall or otherwise moved).
Attorney Alfredo Perez for bond insurer FGIC: Your honor, that is an absolutely valid concern. We are prepared to work with any reasonable restrictions on that. I think that is really a red herring.
Judge Rhodes: I’m not sure the DIA would agree…
Attorney Perez: These are all very responsible people. These are people in the business. … They would be able to satisfy any reasonable concerns the DIA would have.
Judge: So why is it that removal from the walls is necessary to accomplish your goal here?
Attorney Perez: We went back to the bidder, and they indicated that in order to determine the authenticity they really would have to inspect it.
Judge Rhodes: Is there doubt about the authenticity?
Attorney Perez: I don’t think so.
Judge Rhodes: Then why is it necessary?
Attorney Perez: This would be subject to negotiation. We were told the reason it was necessary is that in order to appraise it in a way to make a firm bid, you really have to inspect it.
-By WDET’s Sandra Svoboda
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