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What Happened in Detroit Stays in Detroit? My Wall Street Journal Takeaway on Detroit Institute’s Ordeal

For the long beleaguered Detroit Institute of Arts, there’s been a happy ending, fittingly celebrated at the museum’s gala, which by happenstance occurred the day after Judge Steven Rhodesfavorable ruling.

But unless they take preemptive action, other museums with city-owned collections might not be so lucky, as I discuss in After Detroit’s Close Call, my article on the “Leisure & Arts” page of tomorrow’s (Thursday’s) Wall Street Journal (online now).

What happened in Detroit—a once thriving city, fallen on hard times—could happen elsewhere, unless museums are proactive now in protecting their collections from possible future claims by municipal creditors.

The impetus for my exploration of this issue was commentary I heard on the day of Judge Rhodes’ ruling by the DIA’s canny bankruptcy attorney, Richard Levin, at a New York University art-law conference (co-sponsored by the Appraisers Association of America).

Richard Levin at the NYU art-law conference Photo by Lee Rosenbaum

Richard Levin at the NYU art-law conference
Photo by Lee Rosenbaum

Levin’s advice to museums that could one day find themselves with a Detroit problem is to “see what assets you have that you think might be vulnerable and find a way, properly under state law, to put [those assets] in a charitable trust,” to protect them for the city’s residents.

After the panel discussion in which he participated, which also included Samuel Sachs, former director of the DIA and the Frick Collection, and Ford Bell, president of the American Alliance of Museums, I asked the New York-based lawyer how Detroit’s enormously complicated bankruptcy proceedings, which could have dragged on for years, got settled relatively quickly (in 16 months).

Here’s what he told me:

The judge put it on a very fast schedule. There was actually some banter about that today during the hearing. It was like the Burmese death march. He said, “You’re going to get this done.” And the city did too, because Kevyn Orr, the emergency manager, effectively had an 18-month term, and he said, “I want to this done before I’m outta hear,” which was the end of September. He missed by a little bit.

I also asked whether the case could still drag on longer.

At this point, as a practical matter, no. There are some objectors [my link, not his]. They might appeal. But if the plan gets consummated, which is likely to happen before Thanksgiving, the appellate court can’t really unscramble the eggs, so the appellate court dismisses it and says the appeal is moot.

Annmarie Erickson, the museum’s executive vice president and chief operating officer, whom Judge Rhodes had singled out for praise for her impressive testimony, cleared up for me the question of why the DIA’s director, Graham Beal, didn’t attend the gala to take his victory lap:

He had an opporunity to deliver a paper in Doha, and he had never been there. I told him he missed his moment!

The fundraising party, she said, was an “incredibly joyous moment. People were literally floating through the building.”

Detroit Institute of Arts' Nov. 8 gala Photo from DIA's Facebook page

Detroit Institute of Arts’ Nov. 8 gala
Photo from DIA’s Facebook page

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