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Fate of Detroit’s Art Hangs in the Balance

A Diego Rivera mural at the Detroit Institute of Arts. Part of the collection may be auctioned off.Credit...Joshua Lott/Reuters

With a ruling by a federal judge on Tuesday that Detroit is eligible to enter bankruptcy, the fate of the city’s art collection — one of the finest in the country — now moves front and center in the legal battle over the city’s future.

But the judge, Steven W. Rhodes, questioned for the first time the push by some of the city’s largest creditors to sell paintings and sculpture from the Detroit Institute of Arts, a sale that could generate hundreds of millions of dollars or more. While he did not say specifically that the art should be spared, Judge Rhodes, in a brief mention of the institute by name, said that such a sale would not have helped Detroit avoid bankruptcy.

“A one-time infusion of cash by selling an asset,” he said, would have only delayed the city’s “inevitable financial failure” unless it could have also come up with a sustainable way to enhance income and reduce expenses. Judge Rhodes added that in considering selling assets, a city “must take extreme care that the asset is truly unnecessary in carrying out its mission.”

Some creditors argue that the art is not necessary for the city’s mission. Derek Donnelly, managing director of the Financial Guaranty Insurance Company, a creditor, told The Detroit Free Press, “The D.I.A. or art is not an essential asset and especially not one that is essential to the delivery of services in the city.” A coalition of creditors filed a motion last week asking the judge to appoint a committee to oversee an independent appraisal of the collection, which is owned by the city and includes masterpieces by Bruegel, van Gogh and Cézanne. Financial Guaranty did not return telephone calls seeking comment on Judge Rhodes’s statement.

Michael G. Bennett, an associate professor of law at Northeastern University School of Law, who was in the courtroom during the ruling, said, “Judge Rhodes seemed to be saying something that amounted to a defense of the collection.”

A price tag on at least some of the pieces in the collection is expected soon. The city’s emergency manager, Kevyn D. Orr, hired the auction house Christie’s to appraise hundreds of selected pieces from the institute, and those estimated values are expected to be made public as part of the bankruptcy case by mid-December.

In a talk with The Free Press’s editorial board after Tuesday’s ruling, Mr. Orr said that in “preliminary discussions” with Christie’s, it appeared that the market value of some of the best pieces in the collection would be less than $2 billion — a figure widely cited as a low estimate of the collection’s value — and that the appraisal could come in at less than $1 billion.

“We will try to get some value from the art in some fashion,” he told the board, but he said that did not mean that there was any plan at present to sell any art at auction. (Other possibilities for generating money from the art could include using it as collateral for loans or charging to lend pieces out, although the museum has had little success in doing that in the past.) Mr. Orr, in his presentation to the newspaper, added, referring to the art: “Let’s be clear. That’s a city asset.”

Mr. Orr has said publicly that museum officials must “save themselves” by finding a way to contribute money, possibly as much as $500 million, toward the city’s debt relief.

Mr. Bennett, who has argued publicly against the sale of art, added that the ruling seemed to say that “even if sales from the institute generated a lot of money — let’s say $900 million or even $1 billion — it’s still not going to solve the city’s problem in any fundamental way, and it could end up contributing to more problems down the road.”

No other American museum the size of the institute has ever confronted such a threat to the integrity of its collection. Museum officials, who have said they will go to court to try to prevent any sale, have warned that if any pieces are sold the museum will no longer be able to attract donors and will immediately lose a crucial stream of tax revenue voted in last year by three Michigan counties.

Such a loss of operating revenue and donations, said the museum’s director, Graham W. J. Beal, would almost certainly lead to what he called a “nonprofit controlled liquidation” of the museum.

A version of this article appears in print on  , Section A, Page 20 of the New York edition with the headline: Fate of City’s Art Hangs in the Balance. Order Reprints | Today’s Paper | Subscribe

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