Professor Adam J. Levitin of Georgetown has an excellent piece in Salon this week that adds to what I like to call the sober group of discussions about the Detroit Institute of Art collection in the context of the City of Detroit Bankruptcy. From a learned perspective, Professor Levitin echoes some of the themes we’ve addressed here so far, namely:
The ultimate decision of the availability of the collection for creditors will be a function of state law. Although he doesn’t mention the pending bill by name, the author rightly points out that any legislative approval of the Attorney General’s non-binding statements would probably be the end of any discussion of selling the collection.
Over and above other distinctions of municipal bankruptcies from others, “bankruptcy law generally starts with a baseline of liquidation; if a debtor wishes to reorganize it must provide creditors with at least as much as they would get in a liquidation. That principle, however, does not apply to municipal bankruptcies. Cities, unlike businesses, cannot be liquidated. Furthermore, bankruptcy courts are prohibited from ordering municipal tax increases. All the more so, they cannot force the liquidation of municipal assets.
“Indeed, bankruptcy law does not distinguish among municipal assets, all of which are shielded from forced liquidation, just as cities are shielded from involuntary bankruptcy filings. Creditors can no more force the liquidation of Detroit’s art collection than they can its playgrounds, fire stations or historic monuments.”
Levitin’s post is a welcome addition to the discussion.