Friday, August 23, 2013

Law Prof: Selling DIA's Art Collection "a huge mistake."

Georgetown Law professor and bankruptcy expert, Adam Levitin, thinks selling the Detroit Institute of Art's collection to pay creditors is wrong legally and culturally.
Sacrificing Detroit’s art would be an urban planning mistake of the first order that would unjustly enrich creditors. It doesn’t have to happen. Michigan can, and should, take the legal steps necessary to prevent this from happening.
Donn Zaretsky also pointed out Levitin's three main reasons,

1. If Detroit is to be rebuilt, it needs a cultural base, not just an economic base.

2. It would also be wrong legally. Bankruptcy law has no provision that requires cities to sell their assets to satisfy creditors.

3. Detroit’s creditors may complain that it is unfair for the city to hold on to a valuable asset while not paying them in full. The truth, though, is that liquidating the art collection would represent a giant windfall for creditors. No creditor ever relied on being able to seize the DIA collection when extending credit to the city.

I have a couple of questions for Professor Levitin.

One, we must assume Detroit can be rebuilt, and by this I mean rebuilt to the extent that it can support an institution the size of the DIA. Additionally, would it even make sense to have burned down buildings, a decreased police and fire department force, and potholes the size of moon craters for the sake of having cultural classics?

Two, why would liquidating part--or all--of the DIA's collection represent "a giant windfall for creditors"? What if you owe me $10 and you allege you are broke, but then you find a $5 bill in your pocket that you "didn't know" you had. Does that mean I would be getting a "windfall" if you paid me half of what you owe me? What if you find a $20, would it be so wrong to walk down to the corner store and get two $10s, one for you and one for me?


No comments: