Protecting Art and Cultural Treasures in Bankruptcy (and Extreme Financial Turmoil)

Should governments be able to sell off art and other cultural treasurers when faced with bankruptcy or extreme financial turmoil?

That is the question posed by a recent article in the New York Times about the Portuguese Government’s proposal to sell off masterworks of Joan Miro in order to help pay off their mounting debt. While Portugal has not filed for bankruptcy or a EU bankruptcy-equivalent, many of the issues at play here are relevant in the context of municipal bankruptcies in the United States.

Background

Portugal was one of the EU countries hardest hit by the euro crisis. To help fix its problems and pay off its mounting debt, the government sought to shed some of its non-essential assets. In particular, the Portuguese government decided to sell off several works of Joan Miro that had fallen into state hands. Joan Miro was a Spanish, surrealist painter who is famous for using flat, brightly colored shapes and thick black outlines in this paintings. You would definitely know a Miro if you saw one. The plan was to sell several paintings at auction in February (the list price for all the paints was about $50 million). But the auction was canceled when outcry from the Portuguese community caused the auction house to question the legality of the sale. A spokesman for those who opposed the sale had this to say: “When you auction art, you make sure nobody in Portugal will ever benefit from it, so this is an irreparable destruction of our patrimony…We are in economic trouble, many state assets can be sold, but there are limits and keeping these paintings are part of our dignity.”

Selling Off Art in Bankruptcy

To bring it back to the US and the context of bankruptcy, the question becomes this: should government-owned works of art and other cultural treasures be sold off to pay public debt as part of a municipal bankruptcy? Or, is art part of the public dignity that cannot be sold?

As we have discussed briefly before in class, at least one bankruptcy court has weighed in on this issue. In January, a Federal Bankruptcy Judge presiding over the Detroit municipal bankruptcy overruled a motion by the creditors seeking to evaluate and sell off the collection of the Detroit Institute of Art (the DIA). The judge stated that he was not sure whether art could be sold to help pay off the city’s debts if the art was held by a city-owned museum like the DIA.

In the context of municipal bankruptcies many people in will argue that yes, art is a cultural and historical treasure, but is it more important than the fate of city pensions and payments people rely on for food and bills? If selling the paintings could help pay those checks, shouldn’t the paintings be sold?

My Proposal

Here is my opinion about the issue based on my limited knowledge of bankruptcy and museum management. I think that courts should be able to force municipalities to sell state-owned works of art and cultural artifacts. The city made a promise to its workforce that it would pay them a pension and they should sell their non-essential assets, including art, to try and make good on that promise. A quick look into the art world sheds some light on this opinion that at first glance may seem harsh. I worked at a small museum in Portland during college. The museum was constantly selling works of art from its archives to help meet budget shortfalls and raise money to fund other museum projects. If a museum can sell off art to meet its financial obligations, a city in bankruptcy should likewise be able to sell off art in bankruptcy.

However, I think that certain categories of art should be exempted from sale. First, works of art and cultural artifacts that have the potential to produce substantial income for the municipalities in the future should be protected from sale. For instance, people travel to Detroit just to see the murals of Diego Rivera that are housed in the Detroit Institute of Art. Those people spend money at restaurants and hotels and shops when they come to see the murals. Therefore, ripping the murals off the wall and selling them could be detrimental to the city in the long run because it would lose out on the tourist revenue. Second, works of art and cultural artifacts that are part of the cultural patrimony of a city should also be exempted from sale. In other words, works that are a part of the "public dignity" of a city should remain in the city. What constitutes the cultural patrimony will vary from city to city. I think that experts should be brought in to determine what should be preserved in the city because of its local cultural importance, and what can be sold.

This is my ideal scenario: force the municipalities to sell off most of the art, but allow them to keep the important stuff that is particularly important to the city. While I doubt that this is workable legal framework, I think that this is the best policy considering the concerns involved.       

NYT Article:

http://www.nytimes.com/2014/03/27/world/europe/portugals-move-to-sell-miro-works-raises-debate-of-preservation-vs-privatization.html?action=click&module=Search&region=searchResults%230&version=&url=http%3A%2F%2Fquery.nytimes.com%2Fsearch%2Fsitesearch%2F%23%2Fjoan%2Bmiro%2Fsince1851%2Fallresults%2F1%2Fallauthors%2Fnewest%2F