Most people give gifts to museums without any restrictions, but others often puts restrictions on such gift, such as retaining the right to get the art object back at some nominal cost if it is ever put up for sale. i.e. A Million Dollar painting, may have to be sold for $1 back to the family of the person who gave the painting to Detroit for it was given with that restriction.
Given the value of what we are talking about, I would NOT be surprised if most of the painting and other assets the city possesses may be subject to such restrictions, i.e. the City can NOT sell them and neither can its creditors WITHOUT the permission of the heirs of the person who gave them to the city.
The court can also hold that the items were for public use and thus if sold, the assets must be sold for public benefit NOT to pay off debts. The City can sell them, but the proceeds can NOT be used to pay off debts but for other projects in the city.
Remember we are talking about Municipal Bankruptcy, and the first creditors are those creditors that needed to keep the city running. i.e. current employees. Everyone else is behind them when it comes to payments.
Finally, Bankruptcy is an action in Equity not Law. What that means is the rule is to be fair to EVERYONE not just the people demanding payment. Worse, the rule in Equity is that to get Equity, one must be willing to do Equity, i.e. you must try to be fair to everyone else involved in the bankruptcy not just yourself. Thus a sale of the items may not be viewed as "Fair" to the citizens of Detroit, but a transfer to the State with the State paying their fair value would be equitable (Thus the sale of the Paintings may take on a two step process, something the Governor may see as the only way to actually sell these paintings).
Web cite on this bankruptcy:
http://www.mieb.uscourts.gov/apps/detroit/DetroitBK.cfm
Here is the ORDER denying a request for an Order to order the City to cooperate with creditors as to valuing its Art Collection:
http://www.mieb.uscourts.gov/sites/default/files/detroit/docket2534.pdf
List of all Orders in this Bankruptcy:
http://www.mieb.uscourts.gov/apps/detroit/SelectedOrder.cfm
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