Bankruptcy judge scolds Duggan, calls any plan to fire law firm a ‘bad idea’
By Joe Guillen and Mark Stryker, Detroit Free Press | |
McClatchy-Tribune Information Services |
In a thoughtful, stinging rebuke of Duggan's comments, Rhodes said that firing
"I just want to say for the record, that it would be a really bad idea for the city, the mayor, to terminate
Rhodes' words reached Duggan quickly at a policy conference at
Duggan told reporters on
"There must have been some miscommunication there," Duggan said. While Orr hopes to be gone by
Last week, however, Duggan's office made clear that if the bankruptcy proceedings extend beyond
"We have no intention of keeping
Rhodes is expected to rule on the city's restructuring plan by
Rhodes is considering moving back the trial date's
In other business before Rhodes on Wednesday, a lawyer for the city said
The value of the art at the city-owned DIA and issues relating to a possible sale will be essential elements of what is expected to be a lengthy trial this summer over whether the city's bankruptcy restructuring plan should be confirmed. Orr's plan includes a mechanism to shield the art from a sale, over the objections of some of the city's largest financial creditors.
For months, some of the city's creditors have been pushing for a fuller evaluation of all the art at the DIA. Rhodes has denied a series of creditor motions designed to get more information about the entire collection, which is believed to be worth billions. Rhodes did not force to the city to conduct this latest evaluation.
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Bennett said results of the full DIA art evaluation are not yet available. Orr spokesman
Some creditors have argued that Orr's restructuring plan greatly undervalues the art. They are pushing for a sale to recover more of the hundreds of millions of dollars the city owes them. The centerpiece of Orr's plan is the
An attorney for bond insurer
The Christie's evaluation, which was paid for by the city, has been contentious since Day 1 as creditors objected to the fact that only a small portion of the collection was appraised and complained that the results low-balled the value of the collection. Experts have told the
In May, the
Orr only had city-bought art appraised because other works presented a hornet's nest of donor restrictions and the like if they were subject to sale. But all of the art at the museum is technically owned by the city no matter how it came into the collection. However, whether any of the art can be sold to pay city debt remains an open legal debate.
On Tuesday, the DIA moved to protect itself in court, arguing that its art is legally protected from sale because it is held in a "charitable trust," "public trust" and "implied trust" for the benefit of Detroiters and Michiganders. The museum also said the city is bound by promises made to donors and restrictions relating to gifts of art that prohibit the sale of art to pay city debt. The museum, which supports the grand bargain, also said it would take legal action if the city tried to sell art.
Though municipal bankruptcy law says that the city can't be forced by creditors or the court to sell assets, including art, Rhodes could refuse to approve Orr's restructuring plan if he believes it treats creditors unfairly by favoring one group over another or unfairly shields assets. If that happens or the grand bargain falls apart, Orr might be pushed to propose a sale of art.
Rhodes also reviewed a dispute over data sharing between the city and the court's financial expert. A report from the court-appointed expert hired to assess the
Kopacz needs more time to complete her report as a result of the pace Ernst & Young, a city consultant, is sharing financial data, Lerner said.
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