Displaying items by tag: debt

Sometimes museums get in trouble. Deep trouble. Not because they damage art, or let it get stolen ... but because they sell it. The Delaware Art Museum is the latest target of the art world's ire — for selling one painting from its collection to try and tackle a debt, and for revelations in the past few days that two more paintings are up for sale.

The controversy relates to a serious museum practice with an unfriendly name: "deaccessioning," or the permanent removal of an object from the collection. There are rules around when and how deaccessioning can take place. Break those rules and there are some unpleasant consequences.

Citing a sluggish art market, Delaware Art Museum leaders now expect to raise only $19.8 million by selling three works of art.

That amount is enough to retire the museum's construction debt from a 2005 facilities expansion. But it's not enough to replenish the museum's endowment, or reserve fund, which helps a nonprofit institution weather economic downturns.

Facing an October deadline from creditors, the museum board voted last spring to sell up to four artworks in its 12,500-piece collection to raise $30 million to repay the construction debt and replenish the endowment, which had been depleted for years to cover operational expenses. After exhausting fundraising efforts, officials said the museum was in danger of shutting down.

The Assn. of Art Museum Directors sanctioned the Delaware Art Museum on Wednesday for selling its 1868 William Holman Hunt painting “Isabella and the Pot of Basil” this week to help make debt payments and build its endowment.

The painting, part of the museum’s permanent collection, sold for $4.25 million at Christie's, an incident that left the museum directors association “deeply troubled and saddened.”

“Art museums collect works of art for the benefit of present and future generations,” read the statement from the AAMD, which has long said artworks should be deaccessioned only to generate funds to acquire other works of art and to enhance a collection. “Responsible stewardship of a museum’s collection and the conservation, exhibition, and study of these works are the heart of a museum’s commitment to its community and to the public.”

Alexander Calder's prominent "Black Crescent" mobile has been removed from the Delaware Art Museum's East Court and its collections database, making it potentially the third work the museum will sell by October.

Museum CEO Mike Miller would not confirm whether the mobile by the late sculptor, purchased by the museum in 1961, will be sold. The Wilmington museum is trying to raise $30 million to repay construction debt from a 2005 facilities expansion and replenish its endowment.

General Motors, Ford and Chrysler are driving into Detroit’s bankruptcy reorganization by pledging $26 million to help support retiree pensions while keeping the city’s art treasures off the auction block, officials announced Monday.

The money will go toward city pensions and will be part of the Detroit Institute of Arts’ $100 million commitment to what’s being called the “grand bargain” to resolve the largest public bankruptcy in U.S. history. It’s helping keep city-owned pieces in the museum off the auction block as some creditors demand they be sold to pay off some of Detroit’s billions in debt.

Creditors in Detroit’s municipal bankruptcy have engineered a new appraisal aimed at putting the Detroit Institute of Arts' entire collection in play as a possible chip to maximize the amount the city will be obligated to ante up for debt repayment.

The Detroit News reports that, at some creditors’ behest, the city’s bankruptcy managers have begun trying to place a value on the museum’s entire 66,000-piece collection. That’s quite an escalation from a previous appraisal of only about 1,700 works that the DIA had bought with city funds.

The $816 million art-for-pensions deal that is designed to preserve the Detroit Institute of Arts collection is fascinating, imaginative and clever. But it’s almost certainly illegal. And I’ll show you why.

Were it legal, the deal would help solve two very big problems. The first is Detroit’s radically underfunded pensions, which are at least $3.5 billion in the hole, by the reckoning of Detroit Emergency Manager Kevyn Orr. Simple economics says that Detroit needs to slash these obligations. But the pensions are not lavish, and thousands of retired Detroiters depend on the pensions for their daily bread.

The Delaware Art Museum will auction off one of its iconic Pre-Raphaelite paintings, "Isabella and the Pot of Basil" at Christie's in London next month, museum officials announced Tuesday. The William Holman Hunt oil painting, purchased by the museum in 1947, is one of as many as four works the museum will sell over the next several months to pay off construction debt and replenish its endowment. The Delaware museum boasts the most significant collection of Pre-Raphaelite works outside of the United Kingdom.

Museum officials have declined to release the names of the other works, explaining that it could hurt the market for private sales. They have promised not to sell any works acquired through gift or bequest. Winslow Homer's "Milking Time," one of the museum's most treasured works purchased in 1967, disappeared from its wall and collections database last month. Museum officials won't confirm that it is scheduled to be sold.

Supporters of the Detroit Institute of Arts have offered to donate $330 million to help pay a portion of the city’s bankruptcy debt and save the museum’s finest works from being sold at auction. The donors would like the funds to go to retirees, whose pensions may be cut by as much as $3.5 billion. In exchange, the Detroit Institute’s collection would be protected in any bankruptcy settlement. A statement e-mailed to the U.S. District Court in Detroit said, “All recognize that if these two goals can be accomplished, a third absolutely critical goal of facilitating the revitalization of the city in the aftermath of the bankruptcy will be greatly advanced.”

Detroit filed for bankruptcy in July 2013 and the city is currently over $18 billion in debt. Following the filing, Kevyn Orr, Detroit’s emergency manager, asked Christie’s to appraise the 2,781 city-owned works housed in the Detroit Institute of Arts. The auction house estimated the works to be worth anywhere from $452 million to $886 million.

The Institute has opposed any sale, stating that its art is held in a charitable trust and cannot be part of any auction to help pay Detroit’s substantial debts.

Christie’s announced that Detroit’s art collection, which is housed in the Detroit Institute of Arts, is worth between $452 million and $886 million. The auction house was hired by the city’s emergency manager, Kevyn Orr, to put a price tag on 2,781 works owned by the city after Detroit filed for bankruptcy earlier this year.

The city’s artworks represent about 5% of the Detroit Institute’s holdings, but 11 of the pieces on display at the museum account for 75% of the appraised collection’s total value. Christie’s plans to propose five alternatives to selling the works, which include masterpieces by Vincent van Gogh, Henri Matisse and Pieter Bruegel, that would still allow the city to make a profit off of the treasures.

The city of Detroit is currently over $18 billion in debt.