Governor Snyder Announces Plan to Protect DIA Assets in Detroit Bankruptcy
Snyder announces plan to shield DIA assets from Detroit bankruptcy
By Rick Pluta
Governor Rick Snyder has proposed committing up to $350 million to help mitigate cuts to Detroit pension benefits – as well as keep assets of the Detroit Institute of Arts off the auction block.
The state’s offer would play out over 20 years and would match money raised from private donations to make sure DIA paintings, sculptures, and other works of art don’t get sold off to pay pension benefits that are central to the bankruptcy negotiations.
“This is not bailout,” he said. “This is a settlement. I want to be very clear about that.”
Snyder said one of the conditions would have to be creditors dropping any legal claims to DIA asserts.
“This is not geared toward the bondholders, bankers, or people on Wall Street,” he said. “This is geared towards Michiganders that worked really hard in our state and have a pension and are looking at a difficult situation – how do we improve that situation?”
The governor says he hopes the state’s offer will help move the city through bankruptcy more quickly, which would be a good deal for the state.
The proposal must still be adopted by the Legislature. Republican leaders say hearings will begin very soon.
“We have some questions, some ‘t’s’ that need be crossed, some ‘i’s’ that need to be dotted, but in general is something that’s very positive and being received that way,” said state Senate Majority Leader Randy Richardville (R-Monroe). “So, we will consider it over the next few weeks. We will look in detail, and consider it as best we can.”
The governor’s offer came as Detroit bankruptcy judge Steven Rhodes refused to allow an evaluation of DIA assets to go ahead. Detroit’s creditors could still challenge the plan in bankruptcy court.
The state’s share would match contributions from private donors. It would come from money the state gets annually from the 1998 nationwide settlement between states and tobacco companies. The plan will be part of the governor’s budget proposal to be delivered Feb. 5.