Update Detroit and the Art Museum

1, Detroit - Foundations Pledge $330M to Save DIA
On Monday a coalition of philanthropies and charitable foundations pledged $330 million to boost the bankrupt city of Detroit’s pension funds and to prevent the potential selling off of the collection of the Detroit Institute of Arts. U.S. Chief District Judge Gerald Rosen, the mediator in the city’s ongoing bankruptcy case, suggested that the pledge would be one component of a solution in the unprecedented municipal bankruptcy, rather than a total solution, according to the Detroit Free Press.
Meanwhile the coalition of foundations, which includes local, Michigan-based organizations as well as national philanthropic groups — including the Community Foundation for Southeast Michigan, William Davidson Foundation, Fred A. and Barbara M. Erb Family Foundation, Ford Foundation, Hudson-Webber Foundation, Kresge Foundation, John S. and James L. Knight Foundation, McGregor Fund, and Charles Stewart Mott Foundation — issued this statement regarding their pledge.
 As philanthropies with ties to Detroit and Southeastern Michigan, we share a strong commitment to the revitalization of the region.Many of us have worked for years to help rebuild the city and ensure its prosperous and sustainable future.
 For these reasons, when Chief Judge Gerald Rosen and his mediation team facilitated an opportunity for us to work together for Detroit’s future, we readily agreed.  As a diverse group of local and national philanthropies, we are pleased to contribute to what we hope will be a balanced, workable plan that will enable Detroit to emerge from bankruptcy renewed and stronger.
 The proposal we’ve been working on has one overarching goal: to enable Detroit and its citizens to focus on the task of renewing this great American city. Intended to be part of a larger, agreed-upon plan of adjustment, this plan furthers that goal in two critical ways, by helping the City honor its commitments to its retirees and preserving an extraordinary community cultural asset, the Detroit Institute of Arts.
 While we approach this matter from different perspectives, we are united in the view that the plan offers an important opportunity to help Detroit find much needed solutions to its unique challenges.

Helping to protect the hard-earned pensions of city workers while also preserving the DIA’s collection for all the people of Southeastern Michigan are worthy components of a balanced overall settlement that will help ignite Detroit’s renewal.
 Our participation in this plan is not intended to be the totality of our investment in Detroit now or in the years to come, and it does not replace our existing philanthropic commitments. The philanthropies in this working group are thinking carefully about how this proposal can complement our ongoing individual efforts in Detroit, and be part of our overall strategies for supporting Detroit and Southeastern Michigan to build a strong future.
 As foundations, we recognize the limitations of the role we can play.  But helping the leaders of this community put forward workable solutions to vexing issues is something to which we can contribute.
The foundations’ pledge is contingent on all $330 million going towards propping up the city’s badly underfunded pensions and protecting the DIA collection from being sold off to pay back the city’s creditors. According to Kevyn Orr, Detroit’s emergency manager, those city pensions may be underfunded by as much as $3.5 billion. Christie’s recent valuation of the DIA collection pegged it at between $454-867 million.

http://blogs.artinfo.com/artintheair/2014/01/13/foundations-pledge-330m-to-save-dia/?utm_source=BLOUIN+ARTINFO+Newsletters&utm_campaign=b9f0faf999-Daily+Digest+1.14.14&utm_medium=email&utm_term=0_df23dbd3c6-b9f0faf999-83005727

2. Detroit - Debt Proposal Favors Pension Funds
Rate to Resolve Obligations Would Be Roughly Double That of Bondholders

By
Matthew Dolan Wall Street Journal
Updated Jan. 30, 2014 8:18 p.m. ET
DETROIT—This bankrupt city is proposing to favor pension funds at roughly double the rate of bondholders to resolve an estimated $18 billion in long-term obligations, according to a draft of a debt-cutting plan reviewed by The Wall Street Journal.
The plan's balance-sheet projections show the base scenario designed by the city calls for $4.2 billion to be divvied up among the city's unsecured creditors, including some bondholders and the city's pension funds. The pot of money would be divided to allow Detroit's two municipal pension funds to recover more than 40% of the money the city says they are owed. In contrast, less than 20% of the money owed to unsecured bondholders would be paid.
If the city completes a deal to lease its water and sewerage department to a new regional authority with its suburbs, the recovery for pension funds and bondholders would grow slightly. Leasing the water department would bring about $339 million to the city, according to the plan.
In its July municipal bankruptcy filing, the largest such case in the nation's history,, the city reported about $11 billion in unsecured debt, including $6 billion in health and other benefits for retirees; $3.5 billion for retiree pensions; and about $530 million in general-obligation bonds. City officials said at the time it would have about $2 billion to resolve those obligations.
It was unclear from the plan reviewed by the Journal whether the city is using all of the same estimates for the money owed to unsecured creditors in its draft plan. A person familiar with the draft plan said the recovery rate for the pension funds could end lower than the balance sheet shows.
Details of the plan sent to creditors on Wednesday have been kept under wraps as the city and its debtholders continue to talk in closed-door mediation. The city sent its working draft to creditors in the hopes that the plan with a richer payout might spur some of them to settle with the city individually or, in the least, offer their own suggestions toward modifying the overall proposal, according to another person familiar with the matter.
So far, the plan which is considered to be a rough draft,doesn't include any major settlements with the city's creditors. But it could be more welcome news for unions and pension funds if they agree to settle.
The proposal appears to bake in pledges from the state and private groups for more than $800 million to save Detroit's art collection and help pay off the city's pension obligations. The city, however, is still speaking with debtholders, unions and pension funds, seeking their agreement, which is required by the state and foundations. Detroit's suburbs are also balking over paying to move the city-owned water system into a regional authority they would help control.
The formal plan is expected to be filed in federal court in Detroit within two weeks, officials said. Creditors will vote on the plan, but the final decision rests with the court.
"The proposed plan provides the road map for all parties to resolve all outstanding issues and facilitate the city's efforts to achieve long-term financial health," Detroit Emergency Manager Kevyn Orr said in a statement Wednesday. Mr. Orr's spokesman declined Thursday to comment on the plan's details. Several creditors, who were opposed to the city's early plans to offer creditors, including bondholders and pension funds, less than 20 cents on the dollars owed to them, also declined to comment.
The plan could be key for more than 20,000 on city pensions after U.S. Bankruptcy Judge Steven Rhodes ruled pensions aren't entitled to special protection from potential cuts, despite a Michigan state constitutional provision aimed at shielding pensions. Unions and pension funds argued the pensions essentially were untouchable and have appealed the judge's ruling.
Write to Matthew Dolan at
matthew.dolan@wsj.com
http://online.wsj.com/news/article_email/SB10001424052702304428004579353451973478672-lMyQjAxMTA0MDMwMTEzNDEyWj

 3. DETROIT, MICH.- As an anchor and investor in Detroit’s Midtown neighborhood, an educational resource for students and residents of Detroit, the tri-county area and all of Michigan and a provider of creative programs for numerous social service and community organizations in the City of Detroit and beyond, the Detroit Institute of Arts confirmed its participation in the plan being facilitated by Judge Gerald Rosen, Chief Judge of the U.S. District Court for the Eastern District of Michigan, to help bring an end to the City’s bankruptcy, expand support for Detroit’s pensioners and protect the museum’s collection for the public in perpetuity. Today, the DIA’s Board of Directors approved a commitment by the DIA to raise $100 million from corporate and individual donors toward these efforts. The DIA joins the foundation community ($370 million) and the State of Michigan ($350 million) in support of Chief Judge Rosen’s plan to benefit the people of Detroit and the State. “The DIA’s management and volunteer leadership forthrightly agreed to accept this challenge, despite its difficulty and the many other fundraising commitments the museum manages annually,” said Eugene A. Gargaro, Jr., chairman of the DIA Board of Directors. “We are hopeful this agreement will allow Detroit’s bankruptcy to move forward smoothly as we all work toward a brighter and better future for Detroit.” None of the funds raised by the DIA will directly benefit the DIA. The funds will be directed to a third party, which will disburse the funds for pension payments. As part of the agreement, the City of Detroit will transfer to the DIA free and clear legal title to the museum building, the art collection and all related assets. The DIA will continue to operate the museum with funds raised from its current donor base and from the tri-county millage. “It’s important to note that the DIA is not in bankruptcy, in fact it is functioning extraordinarily well. And, while this new challenge will stretch our fundraising abilities to their capacity, the DIA will continue to provide the residents of Detroit and Michigan with amazing art and exciting programs,” Gargaro said. “The DIA has consistently met its financial challenges and goals and will meet this challenge with enthusiasm and confidence.” The DIA will focus its initial fundraising efforts on Detroit’s corporate community. DIA leadership has compiled a list of initial prospects, finalized support materials, and held several preliminary conversations with interested donors. Details of the overall agreement are still in negotiation, but the DIA is moving forward with fundraising as those talks continue. “The mediators are deeply appreciative of the DIA’s decision to step forward in such a significant way as a partner in this effort to help protect pensions of Detroit’s retirees and safeguard for our City, region and State the DIA’s treasured art collection,” said Chief Judge Rosen. “We all recognize the magnitude of this great undertaking and appreciate the depth of the DIA’s commitment to the City of Detroit and its retirees. As the mediation team continues to work toward a complete, fair and balanced agreed-upon Plan of Adjustment, the DIA’s significant undertaking will play an important role in our efforts.”
  http://artdaily.com/news/67821/Facilitated-by-judge--Detroit-Institute-of-Arts-to-raise--100-million-toward-Detroit-s-revitalization-#.UxTX24WwU2E[/url]

4. BANKRUPT DETROIT: Continuing coverage Update:
http://www.detroitnews.com/article/99999999/METRO01/130718001&template=theme&theme=DETROIT-BANKRUPTCY

    • 10:42 AM, Mar. 11, 2014
    • METRO AND STATE
    • Wayne County

    Deal reached to protect retiree committee in Detroit bankruptcy case

    The city's lawyers today announced they have reached a deal that will protect members of a retiree committee from lawsuits associated with Detroit's bankruptcy case.
    • 12:21 AM, Mar. 6, 2014
    • METRO AND STATE
    • Wayne County

    Detroit seeks quick trial on debt deal with banks

    The city wants a quickie trial over whether a judge should approve an $85M settlement with banks involved in a pension-related debt deal blamed for helping push Detroit into bankruptcy.
    • 11:49 AM, Mar. 5, 2014
    • METRO AND STATE
    • Wayne County

    Detroit bankruptcy judge criticizes liability insurance plan

    U.S. Bankruptcy Judge Steven Rhodes had harsh words Wednesday for attorneys fighting for a lofty insurance policy to protect members of a retiree committee from legal backlash associated with Detroit's Chapter 9 case.
    • 12:54 AM, Mar. 4, 2014
    • METRO AND STATE
    • Wayne County

    Cost-of-living increases sticking point in pension mediation talks

    A proposed freeze in cost-of-living increases is emerging as a major sticking point, as city retirees resume negotiations with Detroit today for the first time since it released its debt-cutting plan last month.
    • 12:06 AM, Mar. 4, 2014
    • METRO AND STATE
    • Wayne County

    New debt deal could save Detroit $201 million

    The city revealed a third settlement with two banks Monday that would end a disastrous pension debt deal blamed for plunging Detroit into bankruptcy.
    • 11:18 AM, Mar. 1, 2014
    • METRO AND STATE
    • Wayne County

    Detroit bond insurer vows fight over DIA art, water department

    A bond insurer Friday vowed Detroit faces a long legal fight over the fate of its valuable art collection and pushed for a private sale of the city's other key asset, the water department.
    • 11:34 PM, Feb. 27, 2014
    • METRO AND STATE
    • Wayne County

    Duggan's bid to cut Detroit auto insurance rates faces tough climb, industry insider warns

    Mayor Mike Duggan wants to keep a campaign promise to tackle the city's high auto insurance rates by creating a city insurance company — an effort that is receiving some sympathy from a state industry official.
    • 3:56 PM, Feb. 27, 2014
    • METRO AND STATE
    • Wayne County

    Chicago will avoid Detroit's bankruptcy fate, rating agency predicts

    Good news for Chicago: A major credit rating agency says the Windy City shouldn't face the same fate Detroit suffered.
    • 5:36 PM, Feb. 25, 2014
    • METRO AND STATE
    • Wayne County

    Bankruptcy judge won't delay Detroit debt-cutting plan

    The city's bankruptcy judge on Tuesday refused to delay the process of approving Detroit's debt-cutting plan, arguing the city would run out of cash if it takes too long.
    • 5:46 PM, Feb. 24, 2014
    • METRO AND STATE
    • Wayne County

    Detroit public safety union leaders say pension cuts 'crippling,' 'unacceptable'

    Officials with Detroit's public safety unions on Monday blasted the city's 'brutal and unreasonable' plan to cut pensions as it aims to shed about half of its estimated $18 billion in debt.
    • 7:33 PM, Feb. 24, 2014
    • METRO AND STATE
    • Wayne County

    Judge sets June trial date for Detroit bankruptcy plan

    The city's bankruptcy judge today set a June 16 trial date for Detroit to prove it can accomplish a plan to shed debt and end the municipal bankruptcy case.
    • 11:37 PM, Feb. 23, 2014
    • METRO AND STATE
    • Wayne County

    Bankruptcy exit plan explores collecting taxes from residents working outside Detroit

    Emergency Manager Kevyn Orr's restructuring plan released Friday includes a plan to try and collect income taxes from Detroit residents who work outside the city limits.
    • 11:12 PM, Feb. 22, 2014
    • METRO AND STATE
    • Wayne County

    Detroit bankruptcy proposal leaves pensioners angry, confused

    When Albert Jackson was hired as a garbage collector for the City of Detroit in 1980, Mayor Coleman Young was working on a plan to save money.
    • 9:34 PM, Feb. 21, 2014
    • BUSINESS

    Plan for DIA rescues both art and Detroit retirees

    The proposed cuts to Detroit pensioners, the real people most affected by the city's historic bankruptcy, aren't what Emergency Manager Kevyn Orr proposed back in June.
    • 5:48 PM, Feb. 21, 2014
    • METRO AND STATE
    • Wayne County

    Bankruptcy exit plan riles Detroit retirees

    Many Detroit retirees are riled at the plan to cut city pensions of nearly 35% for general general retirees and 10% for police and fire members.
    • 10:02 AM, Feb. 22, 2014
    • METRO AND STATE
    • Wayne County

    Detroit plans $1.5B in capital improvements, looks at leasing airport and parking

    Emergency Manager Kevyn Orr plans to infuse $1.5 billion in capital improvements into Detroit during the next decade while looking to sell or lease some of its ...
    • 9:48 AM, Feb. 22, 2014
    • METRO AND STATE
    • Wayne County

    Detroit bankruptcy exit plan: Pension cuts, millions for blight

    The city wants to slash monthly pensions for general retirees 34 percent while retired cops and firefighters would see their pensions cut 10 percent under a ...
    • 11:38 PM, Feb. 21, 2014
    • METRO AND STATE
    • Wayne County

    Orr: Detroit closer to regional water, sewer system

    Detroit's plan of adjustment calls for allowing the city to form a new agency named the Great Lakes Water and Sewer Authority to take over the Detroit Water ...
    • 6:36 PM, Feb. 21, 2014
    • METRO AND STATE
    • Wayne County

    Detroit pension funds can file direct appeal of bankruptcy

    The city's pension funds and others were granted permission Friday to file a direct appeal of the city's bankruptcy. The U.S. 6th Circuit Court of Appeals ...
    • 3:59 PM, Feb. 21, 2014
    • METRO AND STATE
    • Wayne County

    Detroit plan of adjustment gives bondholders 80% cut

    The bankruptcy plan of adjustmentgives unsecured creditors holding Detroit's general obligation bonds an unprecedented cut of 80%, offering just $33 million ...
    • 12:24 PM, Feb. 21, 2014
    • METRO AND STATE
    • Wayne County

    Where does Detroit's Chapter 9 go from here?

    The city's plan of adjustment represents seven months of behind-the-scenes planning and negotiating with creditors that could result in contentious courtroom ...
  1. Detroit filing backs DIA rescue plan

    The proposed $815 million rescue plan for the Detroit Institute of Arts and the city's beleaguered pensioners won endorsement Friday in the city's Plan of ...
    • 2:37 PM, Feb. 21, 2014
    • METRO AND STATE
    • Wayne County

    Orr addresses Detroit bankruptcy exit plan

    Emergency Manager Kevyn Orr discussed the city’s Plan of Adjustment and related disclosure statement in Pennsylvania.
  2. Timeline: The road to Detroit's bankruptcy

    March 2011: Michigan's Public Act 4 emergency manager law takes effect, giving state-appointed overseers of financially troubled cities the power to tear up ...
    • 8:27 AM, Feb. 21, 2014
    • METRO AND STATE
    • Wayne County

    Creditors brace for landmark Detroit debt plan

    The office of Detroit's state-appointed emergency manager Kevyn Orr says the proposal for the city's restructuring through and after bankruptcy is expected to ...
    • 3:37 PM, Feb. 19, 2014
    • METRO AND STATE
    • Wayne County

    Detroit reaches new deal to settle pension debt

    The city reached a new settlement with two banks to end a troubled pension debt deal Friday and will try to seek approval from a bankruptcy judge who rejected ...
    • 5:30 PM, Feb. 19, 2014
    • METRO AND STATE
    • Wayne County

    Judge expects to rule on bondholder payments in a few weeks, urges negotiations

    U.S. Bankruptcy Judge Steven Rhodes said Wednesday he'll issue a crucial decision in two to three weeks about whether general obligation bondholders are ...
    • 2:44 PM, Feb. 19, 2014
    • METRO AND STATE
    • Wayne County

    Judge questions need for new team of lawyers in Detroit bankruptcy case

    The city's bankruptcy judge today questioned the need for a new team of high-cost attorneys to get involved in the city's seven-month-old Chapter 9 case.
    • 4:37 PM, Feb. 18, 2014
    • METRO AND STATE
    • Wayne County

    Detroit's operating officer 'hoping' debt-cutting plan will be filed as early as Wednesday

    Detroit The city's chief operating officer suggested Tuesday that Detroit may file its debt-cutting plan of adjustment Wednesday in federal bankruptcy court, but later ...
    • 11:17 PM, Feb. 17, 2014
    • METRO AND STATE
    • Wayne County

    After rocky start, Orr, Duggan learn to trust each other as they run Detroit

    They call it a work in progress, but Emergency Manager Kevyn Orr and Mayor Mike Duggan appear to be forging a solid working relationship as they try to improve ...
    • 12:07 AM, Feb. 14, 2014
    • METRO AND STATE
    • Wayne County

    Detroit retirees, banks fight for assets

    Detroit's historic bankruptcy has evolved into a populist fight between retirees and banks, as the city prepares to unveil a critical plan next week to shed ...
    • 11:25 PM, Feb. 12, 2014
    • METRO AND STATE
    • Wayne County

    Detroit retirees face Saturday deadline for health insurance decision

    Detroit retirees younger than 65 or not eligible for Medicare face a Saturday deadline to enroll in a private insurance plan to avoid a disruption in coverage ...
    • 11:31 AM, Feb. 11, 2014
    • METRO AND STATE
    • Wayne County

    White House aide: Detroit bailout wasn't 'viable'

    The White House ruled out a bailout for bankrupt Detroit because it wasn't politically possible, a senior Obama administration official said today.
    • 10:37 AM, Feb. 10, 2014
    • METRO AND STATE
    • Wayne County

    Attorney: Detroit to file bankruptcy debt-cutting plan next week

    One of Detroit's lead bankruptcy attorneys said today the city plans to file its debt-cutting reorganization next week.
    • 6:51 PM, Feb. 3, 2014
    • METRO AND STATE
    • Wayne County

    Detroit asks bankruptcy judge to disband creditor committee

    The city of Detroit wants a U.S. bankruptcy judge to disband a committee appointed to represent unsecured creditors, saying it could disrupt mediation talks.
    • 7:47 PM, Jan. 31, 2014
    • METRO AND STATE
    • Wayne County

    Detroit wins retiree health care concessions; barriers to water deal remain

    Detroit The suburbs would control a new regional water system and pay $1.88 billion for the privilege under Detroit's preliminary debt-cutting plan for exiting ...
    • 8:15 PM, Jan. 31, 2014
    • METRO AND STATE
    • Wayne County

    Proposed deal reached over Detroit retiree health care

    The city's bankruptcy mediators announced a proposed deal between the city and retiree groups to resolve a fight over steep cuts to retiree health care.
    • 10:25 AM, Jan. 23, 2014
    • BUSINESS

    Snyder's pledge means others must deliver

    Gov. Rick Snyder's pledge of $350 million to bolster Detroit pensions and rescue the Detroit Institute of Arts from creditors ups the pressure on the museum — ...
    • 11:32 PM, Jan. 22, 2014
    • METRO AND STATE
    • Wayne County

    Judge denies 2nd DIA appraisal, delays health care decision

    U.S. Bankruptcy Judge Steven Rhodes on Wednesday refused to establish a creditor art committee to reappraise the DIA collection and put off a decision on a ...
    • 11:37 PM, Jan. 22, 2014
    • METRO AND STATE
    • Wayne County

    Snyder's plan to protect DIA, pensions may be tough sell

    Gov. Rick Snyder's plan to pour $350 million into Detroit's ailing pension funds over two decades got a wary reception Wednesday among some lawmakers worried ...
    • 10:17 PM, Jan. 21, 2014
    • BUSINESS

    DIA pressed to augment funding role in fix

    Officially, Gov. Rick Snyder won't talk about his plan to pump $350 million public dollars over 20 years into a foundation-led fund to spare the Detroit ...
    • 5:13 PM, Jan. 17, 2014
    • METRO AND STATE
    • Wayne County

    Bond insurer seeks to block Detroit from closing on $120M loan

    A bond insurer wants to block Detroit from closing on a $120 million loan that would pay for public safety and computer upgrades, arguing that a loan backed by ...
    • 11:12 PM, Jan. 16, 2014
    • METRO AND STATE
    • Wayne County

    Judge: Detroit debt deal too costly

    Detroit A federal judge on Thursday said he would not let Detroit continue to make bad financial decisions, rejecting a proposed $165 million settlement with two banks ...
    • 11:29 AM, Jan. 17, 2014
    • METRO AND STATE
    • Wayne County

    DIA may be expected to raise $100M to protect its art, rescue pensions

    The Detroit Institute of Arts likely will be expected to bolster a fund that would supplement city pensions and protect its art from a bankruptcy-induced sale, ...
    • 11:50 PM, Jan. 16, 2014
    • METRO AND STATE
    • Wayne County

    White House's Detroit adviser says blight removal to ramp up

    White House point person on Detroit said he expects federally funded blight removal in Michigan's largest city will ramp up in earnest this spring.
    • 5:00 PM, Jan. 15, 2014
    • METRO AND STATE
    • Wayne County

    Detroit pension board hears pitch to use DIA works to raise capital

    An Illinois finance scholar today urged a city pension fund to push Detroit's emergency manager to solicit competing plans that could preserve the city's ...
    • 5:44 PM, Jan. 15, 2014
    • METRO AND STATE
    • Wayne County

    State's legal bills continue to mount in Detroit bankruptcy

    Lansing The state of Michigan's legal bills in Detroit's bankruptcy continue to mount as a team of private attorneys has already exceeded its initial contract budget.
    • 6:42 PM, Jan. 13, 2014
    • METRO AND STATE
    • Wayne County

    Private groups donate $330M as effort to preserve DIA art builds

    Detroit National and local foundations have pledged more than $330 million to a fund to protect city-owned art at the Detroit Institute of Arts from being auctioned ...
    • 5:01 PM, Jan. 13, 2014
    • METRO AND STATE
    • Wayne County

    Judge to rule Thursday on Detroit's $165M swaps deal

    A $165 million agreement is extremely beneficial to Detroit and the lowest amount Merrill Lynch was willing to accept to terminate a troubled pension debt deal ...
    • 12:43 PM, Jan. 9, 2014
    • METRO AND STATE
    • Wayne County

    Detroit pension funds push for expedited bankruptcy appeal

    Detroit's pension funds continued to push this week for an expedited appeal of the city's bankruptcy eligibility and ability to slash pensions while ...