The financially troubled Asian Art Museum seems to have gracefully escaped bankruptcy.
After a brief scare of losing its credit line and $20 million in assets, city officials have apparently worked out a better deal than the museum could have imagined -- they don't have to pay off the $120 million loan they had with mega banker JP Morgan Chase.
Instead, after some serious "elbow grease" the museum's old debt seems to have disappeared; the bank has forgiven the debt and instead issued it a new $98 million loan.
Officials would not give up more details about what JP Morgan would get out of this deal, citing a nondisclosure agreement.
It gets better.
Mayor Gavin Newsom and Former Mayor Willie Brown have promised to help the museum raise $20 million to help it pay off the new loan.
But they are doing this for good reason. The City has offered up its credit, assuring lenders that the Asian Art Museum won't sink.
"They said they would open their doors and tap into their circles to help fund raising," said Tim Hallman, spokesman for the Asian Art Museum.
In early December, the Asian Art Museum, a public institution, was told that JP Morgan planned to close its $120 million letter of credit on Dec. 21 unless the museum could work out a deal.
City Attorney Dennis Herrera fired off a letter to the bank, threatening to sue if it cut the Asian Art Museum's credit. City officials have since been in and out of negotiations with JP Morgan, announcing the deal today. The proposed deal still has to be approved by the Asian Art Museum Commission, the Asian Art Museum Foundation as well as the Board of Supervisors.
While the lame-duck Newsom was aggressive about getting this deal done before he leaves office, it was the City Controller Ben Rosenfield who sealed the deal, Hallman said.
"He was the real quarter back," said Hallman. "He was the guy who was working at the table with everyone daily to find a solution."
It seems like Rosenfield would make a good interim mayor.
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