Issue link: http://viewer.e-digitaledition.com/i/613029
Barbara Lewis | Contributing Writer I t started with a doodle on the back of a legal pad. Chief Judge Gerald Rosen of the U.S. District Court for Eastern Michigan had been appointed the chief federal mediator to oversee Detroit's bank- ruptcy proceedings. Soon after Detroit declared bankruptcy on July 18, 2013, the city's then-emergency manager, Kevyn Orr, announced that the city-owned collec- tion at the Detroit Institute of Arts would be considered a city asset that could be sold to settle the city's debts. Civic outrage was fast and furious as local residents worried that one of the city's jewels might be tarnished or lost. Later that summer, while meeting with some of the museum's trustees, Rosen wrote the word "art" with a box around it on the back of his legal pad. Then he drew an arrow from the box to the word "pen- sions." Eventually his scribbling resulted in an unprecedented arrangement that brought state, private and foundation money to pension funds in exchange for protecting the artwork from sale. Rosen's idea became known as the "Grand Bargain," a plan that not only pro- tected the DIA and its collection, but also reduced cuts to city pensions. Under the Grand Bargain, a consortium of foundations, corporations, unions and the state of Michigan provided funds to Detroit's two pension systems, and own- ership of DIA pieces transferred to the Founders Society, the nonprofit that was already operating the museum. The DIA, in turn, pledged to raise $100 million to safeguard the pensions. Michigan Gov. Rick Snyder described Rosen's proposal as "a turning point" in the bankruptcy proceedings. The Grand Bargain was sealed on Dec. 10, 2014, when Detroit officially emerged from bankruptcy The Detroit Jewish News recently talked with a number of people involved with the DIA to see how they felt when the museum was threatened and how they feel now, a year later. THE MEDIATORS: GERALD ROSEN AND EUGENE DRIKER Rosen has described the Detroit bankruptcy mediation as the most challenging and personally gratifying mediation of the many he's done. Part of what confronted him as he prepared to lead the city's negotiations with creditors was how little the city had to offer. "I was very, very distressed to see once I got into it, how few assets there really were," Rosen told WDET. Still, the mediation was a major factor that helped all sides to agree and find a way out of bankruptcy. Rosen asked Eugene Driker, a founding partner of the Detroit law firm Barris, Sott, Denn & Driker, to join him and five other judges on the mediation team. "I called him and told him, 'I have an offer you can't refuse,'" Rosen told Crain's Detroit Business, adding that Driker was "an all-star" on the mediation team. Driker, 79, and his wife, Elaine, have been members of the DIA for more than 50 years, and Elaine served on the museum's board for 12 years. They are also active with the local Jewish community. Driker worked on the issue of the city pensions, trying to figure out a way to sat- isfy Emergency Manager Orr, who wanted the pensions cut to pay off creditors, while at the same time preventing disaster for Detroit retirees, many of whom needed their monthly checks to survive. "The city had no assets that could be converted into cash except for the art at the DIA," Driker said. "The mediators were interested in finding the cash, but we were also interested in the future of the city. We knew that after emerging from bank- ruptcy the city would have to be viable, and we felt that selling the art would be a death blow." Soon after conceiving of the Grand Bargain idea, Rosen reached out to the leaders of major charitable foundations for support. On Nov. 5, 2013, the mediators met with representatives from many of the country's major foundations, including the Kresge Foundation, the W.K. Kellogg Foundation, the John S. and James L. Knight Foundation and the William Davidson Foundation. They created a new "supporting organization" called the Foundation for Detroit's Future to serve as the mechanism for converting the funds. The Ford Foundation set the bar by pledging $125 million to the Grand Bargain, Driker said, leading the way to a total of $366 million from the foundations. But the foundations demanded that the state of Michigan contribute funds as well, so Driker and Rosen started lobbying the governor and legislators. It was an election year, so that wasn't easy. The state agreed to support the Grand Bargain — but only if the DIA raised $100 million from its friends and support- ers. When the DIA sought the funds, the donors "stepped to the plate," Driker said. The judge's original doodle has been given to the DIA, but public relations director Pamela Marcil says the museum has no plans to publicly exhibit it. On Nov. 19, Rosen and now-retired Bankruptcy Judge Steven Rhodes, who metro » o n t h e c o v e r One Year Later "Grand Bargain" saved DIA's treasures to the relief of staff, volunteers, citizens. continued on page 12 10 December 10 • 2015 Detroit Institute of Arts Diego Rivera's breathtaking murals are among the art treasures at the world-renowned Detroit Institute of Arts. Detroit's bankruptcy put the collection's fate in question. Key players: Judge Gerald Rosen and Eugene Driker. Michael Ference