The federal judge mediating Detroit's bankruptcy has raised the possibility that regional and national foundations could create a fund that would help support the pensions of retired city employees and keep the city-owned Detroit Institute of Arts' collection from being sold to meet the claims of creditors, the Detroit News reports.

Toward the end of a recent three-hour meeting, Chief U.S. District Judge Gerald Rosen offered what one participant called a "very carefully worded" idea that fell short of asking nine foundations, including the Kresge, Hudson-Webber, Mott, Knight, and Ford foundations, for a commitment to support the plan. The concept could remove two looming obstacles to Detroit’s successful emergence from Chapter 9 bankruptcy — the fate of the DIA collection, which some argue should be sold to meet the claims of creditors, and vested public pensions ostensibly protected by the State of Michigan's constitution.

Under the plan, the nine foundations—facilitated by mediators appointed by Rosen—would create a fund of between $300 million and $500 million to help the city honor its pension commitments and prevent the DIA collection from being liquidated. "What does it take to pull this off, to satisfy everybody around the table?” said a participant in the meeting who asked not to be identified. "And what’s the time frame — twenty years, twenty-five years? It’s a creative solution to this thing."

According to the Detroit News, the size of the fund is one point of contention. DIA officials did not attend the meeting, nor did union or pension fund representatives. Questions also remain about whether the foundations, which are governed by independent boards, ultimately will agree to participate in what would amount to a private-sector bailout of the city’s pension obligations, and to what extent such an agreement would drain foundation resources from other pressing needs in the city.

"This bankruptcy is one of the most consequential events in the history of our city and our region," said Rosen in a recent statement. "The meeting was intended to give them [foundation representatives] a perspective — not only on some of the challenges raised by the bankruptcy but also some of the very real opportunities that the bankruptcy provides for a brighter future."