First Good news on crime in Detroit and now this from the Detroit Free Press: $330M pledged to save pensions, DIA artwork from Detroit bankruptcy.
Rosen, the federal mediator in the Detroit bankruptcy, led a wide-ranging 3½-hour dicussion, during which he floated a novel idea for a grand bargain: Could the foundations pony up hundreds of millions to bolster at-risk city pensions and prevent the Detroit Institute of Arts from having to sell its treasures?This deserves Professor Farnsworth. Preserving both pensions and the DIA looked like it would be almost impossible. The key word is 'almost,' as this proposal shows. I'm very optimistic about the possible deal. Still, it could still fall short.
It was a long shot at best. But on Monday it may have paid off big time.
Rosen announced nine foundations pledged $330 million that would be used to shore up pension funds so the art would not have to be sold, a crucial step toward solving the contentious issues surrounding pensions and paintings. The money represents an unprecedented coalition of foundation support for a troubled American city and a bold stroke of out-of-the-box creativity. It is a potential game changer in Detroit’s struggle to restructure $18 million in municipal debt in bankruptcy court.
Despite the immediate acclaim that greeted the foundations’ pledge Monday, a myriad of challenges remain that could scuttle a deal. Leaders of the pension funds representing city workers and police and fire personnel would have to accept the terms. The $330 million still remains shy of Rosen’s original goal of $500 million and is unlikely to satisfy unions trying to protect pensioner nest eggs. Other creditors are likely to scratch and claw for more money from the city, hoping paintings and other assets can be liquidated.This will vastly reduce the heat in the bankruptcy, as it removes the possibility of affecting people's entertainment. People demand that their entertainment go on, as I've pointed out in Detroit River fireworks show continues and Detroit's Thanksgiving Parade--the tradition continues. According to our screwed-up priorities, that's more important than keeping pensions whole.* As my friend Nebris has said about my observations on this topic, "Americans will take all manner of social, economic and political abuse, but will rise up with righteous fury when you disturb their Entertainment."
Still, bankruptcy experts said that if multiple parties, including pension representatives, sign on to the plan, it might create breathing room and momentum needed for Rosen and Detroit emergency manager Kevyn Orr to reach a global settlement.
*I don't agree with these priorities; that's why I called them screwed-up. I plan on collecting my pension one day, and I don't want people messing with that.