Investors offer $4B loan to bankrupt Detroit with DIA as collateral
By Nathan Bomey, Detroit Free Press | |
McClatchy-Tribune Information Services |
But the deal would require the city to pledge the
What's more, a person familiar with the framework of the deal -- proffered by
"We can structure it to make it affordable and greatly reduce the remote possibility that any sales would ever occur,"
Illingworth said options include allowing interest-only payments in the early years or spreading out the payments over a long period of time.
The timing of the offer, less than a week before
The insurers are expected to argue during the city's bankruptcy trial that the DIA is being given away for far less than it's worth.
"The city cannot ignore the fact that the
The investor group said today that it had increased its loan offer after an art adviser hired by
The city swiftly dismissed
"The city will not sell or leverage the art," Nowling said in an e-mail. "This latest proposal is nothing but a thinly veiled attempted by our remaining hold-out creditors to improve their recovery at the expense of the city's pensioners and its cultural assets."
Complicating matters is a bitter dispute about whether the DIA's property legally can be sold. The museum's leaders have vowed a legal battle if the city pursues a sale or a collateralized loan.
Of course, if the city can't establish ownership rights, pledging the art as collateral is not an option.
But
If the city were to default on an
Bankruptcy law does not allow creditors or the judge to force the city to sell assets, but the judge can reject a plan that does not properly account for the value of assets it chooses to sell.
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