governor to push plan to protect Detroit art, pensions: court
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[January 23, 2014]
(Reuters) — Michigan Governor Rick
Snyder is set to announce "significant state participation" in a plan to
aid Detroit's art museum and public pensions, mediators said Wednesday,
as the city works through its historic bankruptcy.
The move by the state's Republican governor comes after plans for
state involvement first were reported in local media last week. At
the time, Michigan House of Representatives Speaker Jase Bolger, a
Republican, indicated he would not support state participation in
any direct bailout of Detroit.
Snyder's spokeswoman, Sara Wurfel, confirmed the governor and
Republican legislative leaders will hold a press conference
concerning Detroit later on Wednesday.
The U.S. Bankruptcy Court mediators' statement said the governor
intends to work with the state legislature to gain support for the
"We hope that the governor's announcement will further assist the
parties in reaching as many agreements as possible which can be
included in an agreed-upon plan of adjustment," the mediators said
in the statement.
Last week, a group of foundations said they pledged more than $330
million to help preserve the Detroit Institute of Arts' collection
and assist in shoring up the cash-strapped city's retirement fund.
With Detroit sinking under more than $18 billion of debt and
liabilities, its state-appointed emergency manager Kevyn Orr filed
the biggest Chapter 9 municipal bankruptcy in U.S. history in July.
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Orr has opened the door to possibly monetizing some of the artwork,
while severely cutting pension benefits. Detroit's biggest creditors
are its pension funds and Orr has pegged the city's unfunded pension
liability at $3.5 billion.
Last month, auction house Christie's, which was hired by the city,
appraised the value of Detroit-owned works at $454 million to $867
million. Later on Wednesday, U.S. Judge Steven Rhodes, who is
overseeing Detroit's bankruptcy, plans to rule on whether the art
should be independently valued.
(Reporting by Karen Pierog, additional reporting by Joseph
Lichterman in Detroit; editing by Dan Burns and Meredith Mazzilli)
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