Now the largest municipality in the history of the United States to go bankrupt, Detroit very nearly lost its famous art collection to its creditors. To protect its collection, Detroit proposed what is now often referred to as the "grand bargain," which involved creating a corporation that paid $816 million for the entire art collection provided that the amount paid was earmarked for pension holders in Detroit. The deal resulted in realizing two goals: keeping the art collection in Detroit and protecting pensioners who faced a huge loss in the wake of the bankruptcy. Critics of the grand bargain claim that it is inconsistent with the principles of bankruptcy law, describing it as a fraudulent transfer, as failing to satisfy the "best interests" test, and as unfairly discriminating against some creditors. This Note argues against those criticisms, and makes the case that, not only was the grand bargain consistent with bankruptcy law, it was a model to be emulated by other municipalities facing bankruptcy.
Weeks, Jonathan A.
"The Motor City Needs Oil (On Canvas): An Argument in Support of Detroit's "Grand Bargain","
Georgia Law Review: Vol. 50:
3, Article 9.
Available at: https://digitalcommons.law.uga.edu/glr/vol50/iss3/9