October 30, 2014
On July 18, 2013, the City of Detroit filed for Chapter 9 bankruptcy, the largest municipal bankruptcy filing in our history. Creditors of the municipality sought out what they could to satisfy the debt owed. Arguably the most contentious and largest item on the chopping block was the collection of over 60,000 pieces of art located in the Detroit Institute of Arts (DIA). The collection’s value varies, but estimates range from 1 up to 8 billion dollars. The museum is one of the most impressive in the country, and contains works from Vincent van Gogh, Pablo Picasso and my personal favorite John Singer Sargent.
As an art enthusiast with office walls covered in prints, I have been worried for months as to what could happen to the collection and what precedent this could set for future bankruptcies. I could not possibly scour through WestlawNext’s over 10,000 news sources daily even if I wanted to. There are thousands of articles on Detroit’s bankruptcy proceedings alone and I was most concerned with those involving art. I set up a WestClip in the News content on WestlawNext to let me know every time certain terms were used. This way WestlawNext could do the daily digging for me and send me an email with my news results and terms highlighted.
Through my WestClip emails I learned quickly that an agreement was reached and the art is saved. However, many other institutions are not as fortunate as the DIA. The Corcoran Gallery of Art and The Delaware Art Museum are just a few of the many other institutions that have been forced to close or sell off their collections.
So what are the legal and ethical concerns in selling art? Since many art institutions are non-profits or charitable trusts, they owe fiduciary duties to their beneficiaries who are the general public. Museums also have their own professional ethics rules as controlled by the Association of Art Museum Directors and the American Alliance of Museums. These entities have the ability to sanction a museum for inappropriately selling off art.
There is also the lost benefit to the community to consider. Museums educate the public and increase culture. As the Chief Operating Officer of the DIA mentioned, they take us “out of everyday life in a way that is satisfying.” Over 60,000 children in Detroit visited the DIA last year alone. Last, for many cities, losing the art or closing a facility altogether decreases tourism and ultimately revenue.
I hope that Detroit’s decision to save its art will become the rule and not the exception. The conclusion of Detroit’s bankruptcy may come soon as Judge Steven Rhodes will reveal his decision on whether he approves the bankruptcy plan on November 7th.
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