(Reuters) - U.S. philanthropic foundations have pledged more than $330 million to help preserve the Detroit Institute of Art’s collection and assist in shoring up the cash-strapped city’s employee pensions, the mediators overseeing Detroit’s bankruptcy negotiations said on Monday.
In a statement, the mediators said other foundations are expected to pledge assistance in the near term.
“As the mediators attempt to achieve a settlement of all claims, it bears emphasis that the foundations’ agreement to participate is specifically conditioned upon all of their funds being committed to the twin goals of helping the city’s recovery from bankruptcy by assisting the funding of the retirees’ pensions and preserving the DIA’s art collection as part of an overall balanced settlement of disputes in the bankruptcy,” the mediators said.
Last month, auction house Christie’s appraised the value of Detroit-owned works at the institute at $454 million to $867 million. That collection, which accounts for only around 5 percent of the museum’s 66,000 works, includes paintings by Vincent Van Gogh and Rembrandt.
The city hired Christie’s after Kevyn Orr, Detroit’s state-appointed emergency manager, opened the door to possibly monetizing some of the artwork to help deal with more than $18 billion of debt and other obligations that led to the city’s July 18 municipal bankruptcy filing.
Detroit’s biggest creditors are its public pension funds and Orr has pegged the city’s unfunded pension liability at $3.5 billion.
The DIA has objected to the move, contending the museum’s collection did not constitute a municipal asset.
The mediators, headed by federal judge Gerald Rosen, said the philanthropic effort for the DIA was being funneled through a leadership committee consisting of the heads of the Ford Foundation, the Kresge Foundation, the John S. And James L. Knight Foundation and the Community Foundation for Southeast Michigan.
Reporting by Dan Burns and Karen Pierog; Editing by James Dalgleish and David Gregorio