Grand Bargain Transaction Closes
Today, the City of Detroit, State of Michigan, the twelve foundations represented by an affiliate of the Community Foundation for Southeast Michigan and The Detroit Institute of Arts closed the Grand Bargain, which Judge Steven W. Rhodes of the United States Bankruptcy Court for the Eastern District of Michigan described as the “cornerstone” of the City of Detroit’s plan of adjustment.
The Grand Bargain is the global transaction that involves (1) the contributions of $366 million by the foundations, $100 million by the DIA and nearly 50 foundations, corporations and individual donors supporting the DIA, and $350 million by the State of Michigan, all for the benefit of City of Detroit pensioners and retirees, (2) the conveyance by the City of Detroit to the DIA of all of the City’s interests in all museum assets, including the DIA’s encyclopedic art collection and building, and (3) the commitment by the DIA to hold the museum assets in trust for the benefit of the residents of the City of Detroit, counties of Macomb, Oakland and Wayne, and the State of Michigan in perpetuity.
Honigman represented its longtime client the DIA in the negotiation and consummation of the Grand Bargain, as well all aspects of the DIA’s involvement in the City of Detroit bankruptcy proceedings. “The consummation of the Grand Bargain as part of the City’s emergence from bankruptcy ensures that there are good days ahead for our city, our region and arts and culture in the century to come,” stated DIA General Counsel Alan S. Schwartz and Joshua F. Opperer.
“The Grand Bargain is a remarkable achievement for all the parties involved and could not have materialized without the leadership of mediators Chief Judge Rosen and attorney Eugene Driker, the overwhelming generosity of the foundation community and the judgment, commitment and efforts of the DIA’s leadership, chairman Eugene A. Gargaro, director Graham W.J. Beal, COO Annmarie Erickson and CFO Robert Bowen,” said Schwartz.
Opperer said, “All parties involved with the negotiation and consummation of the Grand Bargain, including the foundation community leadership of Ricardo Castro on behalf of The Ford Foundation and Robin Ferriby on behalf of the Community Foundation for Southeast Michigan and all of the representatives of the City of Detroit and State of Michigan, worked through numerous complex and material issues over many months, always with a sense of purpose – everyone involved knew what the Grand Bargain could mean and, in fact, will mean to the City and the State.”
Alan S. Schwartz, who has been general counsel to the DIA for more than 30 years, was senior counsel to the DIA in connection with the City of Detroit’s bankruptcy. Opperer, who serves as co-general counsel of the DIA with Schwartz, led the Grand Bargain transaction team. Also with substantial involvement with the Grand Bargain were Jonathan R. Borenstein (real estate), Charles Nida (nonprofit and probate), Barbara A. Kaye (corporate), Matthew J. Moussiaux (corporate) and John D. Pirich (government relations).
Jason Abel (litigation), Judy B. Calton (bankruptcy), and Scott B. Kitei (bankruptcy) led the litigation team. Also working on these matters for the DIA were Kirk Profit of Government Consultant Services Inc. as government relations advisor and Richard Levin of Cravath, Swaine & Moore LLP as special counsel.