Katya Kazakina reports on the surprise move by Detroit’s creditors to milk $2bn from the Detroit Institute of Arts’s by generating asset backed loans. How loans against the art would improve Detroit’s fiscal position is unclear. The additional interest will only add to the city’s future obligations. As with all aspects of Detroit’s bankruptcy, a Federal judge will have the final say.
Perhaps more interesting in the news report is the identity of the four entities making separate or combined offers. Two are Chinese:
Detroit could get four offers to turn some of its art collection into as much as $2 billion in cash, either as a loan backed by the works or as a purchase, creditors including bond insurers said in a court filing.
The creditors today asked U.S. Bankruptcy Judge Steven Rhodes to force the city to cooperate with the potential bidders, who would like to investigate the value of the art. The possible bidders include Catalyst Acquisitions LLC/Marc Bell Capital Partners LLC, Art Capital Group LLC, Poly International Auction Co. and Yuan Management Hong Kong Ltd.
Poly International, an auction house owned by China’s government, seeks to buy all the Chinese works in the city’s art collection for as much as $1 billion, according to court filings.
Yuan said it would like to buy 116 works for as much as $1.47 billion and Catalyst said it may be interested in paying as much as $1.75 billion for the entire collection.