Detroit is offered a $4 billion loan in exchange for DIA art

Aug 28, 2014

The Detroit Institute of Arts
Credit Flickr

A New York lender called Art Capital Group is offering a $4 billion loan to the city of Detroit if it puts up its art collection as collateral.

Detroit News business columnist Daniel Howes said the city would be wise to pass on this offer.

The proposal is being backed by holdout bond insurers Syncora, and the Financial Guaranty Insurance Company.

Howes said the proposal would put DIA art one step closer to being sold, pensioners would receive a lot less money, and the loan would be spread around to other creditors.

Howes said city officials said they were not interested in discussing the deal, and that they say they will stand behind the "Grand Bargain" because it is money in hand and the deal will help avoid legal issues.

Howes also said the offer is just now coming up to stall the bankruptcy trial.

Read Howes column in the Detroit News here.

*Listen to the full interview with Daniel Howes above.