Last July, New Yorker art critic Peter Schjeldahl had the temerity to take a humanist stand on the issue of Detroit’s art in the context of its bankruptcy. He was excoriated by arts writers for saying the pensioners should be put in a superior position to the city’s holding on to it’s art:
Art will survive. The pensioner will not. I do not view the impending decision as a close call.
Of course, Schjeldahl wasn’t saying that the art should be sold or that it would a good thing to sell it. What he said was that the commitment to the pensioners super-ceded the city’s pride in owning cultural treasures. A bankruptcy is all about creating a hierarchy among the creditors.
For all the dudgeon expressed by those on the “side of the art,” their hysterics did nothing to advance the negotiations. Luckily, two Federal judges acted to guide the negotiating process in a manner that has achieved the best possible outcome.
Pensions for the city workers have been put at the top of the list of priorities. The art has been made a close second and now we see that financial creditors are being made to wait last in line (as it should be.) Dealbook explains this morning:
Detroit is preparing to resolve its bankruptcy case by splitting its unsecured creditors into two groups and treating them differently, according to people briefed on the city’s plan.
One group, composed of retired city workers, would get cash for their claims, while others, holders and insurers of certain city debts, would get a series of notes of uncertain but lesser value. One person, who asked not to be identified because of a confidentiality order, called the plan “massively discriminatory.”
Now that’s the kind of discrimination few but philistines would object to. However, this outcome required a credible threat to monetize the art. That is precisely what Schjeldahl was trying to say before he was shouted down.
Detroit Plan Is Said to Split Creditors Into 2 Groups (Dealbook/NYTimes)