Orr laying the groundwork for sale of DIA art

**Novine** · August-05-13, 02:23 PM

Actions speak louder than words.

http://www.detroitnews.com/article/2...text|FRONTPAGE

**p69rrh51** · August-05-13, 02:30 PM

All assets do have to be valued, but he could have at least hired the one local company that has the ability to appraise the art owned by the city.

**TexasT** · August-05-13, 02:36 PM

Originally Posted by p69rrh51

All assets do have to be valued, but he could have at least hired the one local company that has the ability to appraise the art owned by the city.

DuMouchelles? They already said they would refuse if asked.

And Orr is pretty much required to appraise the art. I'd be surprised if any were sold but he must account for it.

**Zug** · August-05-13, 03:05 PM

Anyone actually know what percentage of the art is owned by the city? I know some is in trust, etc. etc. I ask because would the city be required to sell ALL of the art it owns if creditors demand it? And if it's a good portion, could there be a 90% empty art museum or something?

Also, I know the argument about federal laws trumping state laws...but is there no federal guidance on how stuff in a museum should be treated? Say, if Congress refused to raise the debt ceiling [[don't know if this is a good example), could the Smithsonian be forced to sell all of it's assets to satisfy creditors? That seems odd...but could that happen?

**TexasT** · August-05-13, 03:19 PM

Originally Posted by Zug

I ask because would the city be required to sell ALL of the art it owns if creditors demand it? And if it's a good portion, could there be a 90% empty art museum or something?

The creditors cannot force the city to sell the art. The judge cannot force the city to sell the art.

The judge will look at what the city is willing to give up and determine whether that's "fair" and if the city is negotiating in good faith. If the judge thinks the city is screwing around, he can kick the city out of bankruptcy court where it will lose its protections.

**p69rrh51** · August-05-13, 03:24 PM

Originally Posted by TexasT

DuMouchelles? They already said they would refuse if asked.

And Orr is pretty much required to appraise the art. I'd be surprised if any were sold but he must account for it.

From what I understand DuMouchelles is only against the sale of the art.

**Patrick** · August-05-13, 03:25 PM

Originally Posted by TexasT

DuMouchelles? They already said they would refuse if asked.

And Orr is pretty much required to appraise the art. I'd be surprised if any were sold but he must account for it.

Not me...the sharks smell the blood and there is plenty of em out there. The Chinese have been looking far and wide to add to their perpetual "one-upmanship" of the US and the West. I am sure if they made an offer on the Rivera Court, it would be considered. Not sure how they would be able to remove it, but it could be done....sadly.

http://www.scmp.com/news/china/artic...l-not-approved

**313WX** · August-05-13, 03:25 PM

Originally Posted by Zug

Anyone actually know what percentage of the art is owned by the city? I know some is in trust, etc. etc. I ask because would the city be required to sell ALL of the art it owns if creditors demand it? And if it's a good portion, could there be a 90% empty art museum or something?

Also, I know the argument about federal laws trumping state laws...but is there no federal guidance on how stuff in a museum should be treated? Say, if Congress refused to raise the debt ceiling [[don't know if this is a good example), could the Smithsonian be forced to sell all of it's assets to satisfy creditors? That seems odd...but could that happen?

All of the art is owned by the city of Detroit, not even the DIA disputes that. Now whether or not it can be sold, since much of the art is donated, is a different story. And it has nothing to do with the creditors demanding it, but whether Steve Rhodes would consider the selling of DIA art work an equitable plan.

BTW, most of the art in the DIA is not on display at once. My understanding is that the art work is generally displayed in rotation.

**TexasT** · August-05-13, 03:28 PM

Originally Posted by p69rrh51

From what I understand DuMouchelles is only against the sale of the art.

Yes, that's what has been in the press. But there's no way Orr can guarantee that the appraisal won't be used for a sale. You never know what will happen in litigation, only likelihoods. Even if it's 99.99% not going to happen, he can't say that it won't [[which is why he couches in terms of "we have no interest in selling art"). So I doubt DuMouchelle's would get involved, even if Orr gives them the most assurances that he can.

**Wesley Mouch** · August-05-13, 03:29 PM

Mr. Orr is doing his job. If its an asset, and you don't value it you're not doing your job.

In the end, he has to make a recommendation. How can he do so without knowing the value of what the city owns? Doesn't mean he'll include it in the bankruptcy recommendation.

If those who are crying now wanted to protect those assets, they should not have opposed the EFM/CA approach.

Now, the law of the federal land shall rule all. And we're just players in the game. We missed our chance to set the rules.

**TexasT** · August-05-13, 03:31 PM

Originally Posted by 313WX

All of the art is owned by the city of Detroit, not even the DIA disputes that.

I don't believe that's true. I was under the impression that some of the art in the DIA is on loan from private owners and trusts. Some of the art is owned by the City, though.

**p69rrh51** · August-05-13, 03:43 PM

Originally Posted by TexasT

Yes, that's what has been in the press. But there's no way Orr can guarantee that the appraisal won't be used for a sale. You never know what will happen in litigation, only likelihoods. Even if it's 99.99% not going to happen, he can't say that it won't [[which is why he couches in terms of "we have no interest in selling art"). So I doubt DuMouchelle's would get involved, even if Orr gives them the most assurances that he can.

TT actually selling off prized possessions is what DuMouchelles has been doing since 1927. Of the 30ish Grosse Pointe Mansions liquidated in the last 60 years they sold off the lion's share including art work that would rival the DIA's collection. I think they would do the appraisal if asked. Orr seems to love spending the city's money with out of town firms.

**JBMcB** · August-05-13, 03:45 PM

Originally Posted by 313WX

All of the art is owned by the city of Detroit, not even the DIA disputes that.

Depends on what your definition of "ownership" is. They hold the title for the art - true, but that title may or may not allow them to sell it. Not sure if that's what you meant by if the judge would allow sale of certain pieces, but I think the clarification needs to be made.

The zoo is a good example. Detroit owns the zoo property, and the Rackham golf course property. However, under the covenants of the title, they are not allowed to sell either parcel to a private entity, IIRC. If they sell, then either the Rackham trust gets the money, or the property reverts to their control, I don't remember which is true.

Not sure if similar restrictions apply to other kinds of property, I know that real estate gets special treatment when these kinds of covenants are involved.

**Gistok** · August-05-13, 03:50 PM

There are probably at least 1/2 dozen different types of scenario's over what is displayed at the DIA... some items are on permanent loan, others owned by the city, others by the Founders Society, other items still owned privately.

But what is certain is this... regardless of the outcome of the Bankruptcy... no future donor will ever give art to the city outright any longer. More likely it will be "on loan" or "in trust"...

**mwilbert** · August-05-13, 04:09 PM

Originally Posted by Gistok

There are probably at least 1/2 dozen different types of scenario's over what is displayed at the DIA... some items are on permanent loan, others owned by the city, others by the Founders Society, other items still owned privately.

But what is certain is this... regardless of the outcome of the Bankruptcy... no future donor will ever give art to the city outright any longer. More likely it will be "on loan" or "in trust"...

Regardless of how the bankruptcy is resolved, once it is I'm sure they will change the legal ownership of the collection, or whatever is left of it. It isn't surprising it wasn't done five or ten years ago, but it should have been.

**MikeyinBrooklyn** · August-05-13, 04:36 PM

I hope this doesn't occur, but it does not surprise me in the least. What the city owns is subject to being sold to pay off the city's debts. One positive benefit of the city losing some art, is that every future donation in the western world will a clause not allowing a sale of the donated art. But, alas, it will not be retroactive.

**trotwood** · August-05-13, 07:06 PM

Pardon my ignorance[[and possible thread jacking)but I'm a bit confused about Kevin Orr's status or more to the point his continued status after the bankruptcy issue is settled by the courts.
My question is once a judge determines Detroit can indeed go into bankruptcy what becomes of Kevin Orr? Does he remain in place as the EM or does bankruptcy negate the need for an EM?

**Hermod** · August-05-13, 07:16 PM

Originally Posted by trotwood

Pardon my ignorance[[and possible thread jacking)but I'm a bit confused about Kevin Orr's status or more to the point his continued status after the bankruptcy issue is settled by the courts.
My question is once a judge determines Detroit can indeed go into bankruptcy what becomes of Kevin Orr? Does he remain in place as the EM or does bankruptcy negate the need for an EM?

The court will probably appoint Mr. Orr as the "receiver in banruptcy" to perform executive functions while the city is going through the process.

**renf** · August-05-13, 07:19 PM

Is the Moonogian Mansion also going to be sold? You might think it could
retail for $500K? Or is it somehow protected from a bankruptcy sale?

**mwilbert** · August-05-13, 07:51 PM

Originally Posted by Hermod

The court will probably appoint Mr. Orr as the "receiver in banruptcy" to perform executive functions while the city is going through the process.

I don't believe the court has the power to appoint a receiver in a chapter 9 case. In the cases where there has been a receiver, it looks to me as if the receiver was appointed by the state government, not by the court. In Detroit's case, Mr. Orr is already there and it would be bizarre if they appointed someone else.

**Novine** · August-05-13, 08:12 PM

Orr will continue to serve as EM. In theory, the city could have him removed after 18 months of service but the Republican passed EM law effectively gives the state the power to control the city even if the City Council voted to remove him. I doubt Orr will stick around past 18 months or even that long. He'll push the city through bankruptcy and leave it to someone else to clean up the wreckage left behind.

**313WX** · August-05-13, 08:15 PM

Originally Posted by TexasT

I don't believe that's true. I was under the impression that some of the art in the DIA is on loan from private owners and trusts. Some of the art is owned by the City, though.

From the DIA website:

The building, property and collection are owned by the City of Detroit.

http://www.dia.org/about/facts.aspx

**313WX** · August-05-13, 08:17 PM

Originally Posted by JBMcB

Depends on what your definition of "ownership" is. They hold the title for the art - true, but that title may or may not allow them to sell it. Not sure if that's what you meant by if the judge would allow sale of certain pieces, but I think the clarification needs to be made.

The zoo is a good example. Detroit owns the zoo property, and the Rackham golf course property. However, under the covenants of the title, they are not allowed to sell either parcel to a private entity, IIRC. If they sell, then either the Rackham trust gets the money, or the property reverts to their control, I don't remember which is true.

Not sure if similar restrictions apply to other kinds of property, I know that real estate gets special treatment when these kinds of covenants are involved.

Agreed. Read the rest of my post.

**Lowell** · August-05-13, 08:23 PM

Originally Posted by Novine

Orr will continue to serve as EM. In theory, the city could have him removed after 18 months of service but the Republican passed EM law effectively gives the state the power to control the city even if the City Council voted to remove him. I doubt Orr will stick around past 18 months or even that long. He'll push the city through bankruptcy and leave it to someone else to clean up the wreckage left behind.

Not to worry. Krystal Crittendon is going to fire Orr after she is elected Mayor this autumn. She said so in a debate. He won't be able to sell the collection before then.

**Newdetroit** · August-05-13, 08:24 PM

I read the Plain Dealer from Cleveland. People there are already talking about how the Cleveland Museum of Art should buy some of Detroit's paintings for a bargain.