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Detroit’s-bankruptcy-filing-rattles-already-nervous-muni-investors

Yesterday, Detroit Mayor Dave Bing said there is “going to be a lot of pain” for people following a judge’s ruling that the city is eligible to fix its finances in bankruptcy court. The city of Detroit officially became the largest municipality in U.S. history Tuesday to enter Chapter 9 bankruptcy after a judge declared it met the specific legal criteria required to receive protection from its creditors.

“It is indeed a momentous day,” U.S. Bankruptcy Judge Steven Rhodes said at the end of a 90-minute summary of his ruling. “We have here a judicial finding that this once-proud city cannot pay its debts. At the same time, it has an opportunity for a fresh start. I hope that everybody associated with the city will recognize that opportunity.”

In a surprise decision Tuesday morning, Rhodes also said he will allow pension cuts in Detroit’s bankruptcy. He emphasized that he won’t necessarily agree to pension cuts in the city’s final reorganization plan unless the entire plan is fair and equitable.

“Resolving this issue now will likely expedite the resolution of this bankruptcy case,” he said.

The judge’s ruling gave Detroit the green light to enter Chapter 9 bankruptcy.

“The court finds that Detroit was and is insolvent,” he said. “The court finds that the city was generally not paying its debts as they became due.”

Rhodes said bankruptcy was a “foregone conclusion for a very long time. Cities often wait longer to file for bankruptcy than they should have, and the city of Detroit was no exception.”

As part of the city’s plan includes controversial cuts to unsecured creditors and asset sales, including a potential spinoff of the water and sewer department and the possible sale of Detroit Institute of Arts property.

 

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  • K

    that is terrible the whole thing but those pensions are killing me the most. i just imagine some 80 year old woman or man who worked hard all their life, did what they were suppose to in the city and for the city and now in their last years their income will be reduce smh i sure hope that is one that will remain off the table

  • SE

    Omg I feel so sorry for the people who live in Detroit.

    • MeToo

      I live in Detroit and I feel sorry for myself and the rest of the residents. My family is working HARD to move to a better city or state. Things have gotten so horrible (or maybe purposely allowed to get so horrible) that many black residents have moved or want to move (who wants to live in an area where the police/ems may or may not respond), and more white people are moving into certain areas (no wonder I have been seeing Becky and Brad biking/jogging around town), so gentrification is already happening. They’ll live in their cozy little areas (with beefed up police presence), and the majority of black people will be either pushed out (already happening), or be locked out of the better areas

    • SE

      @ MeToo

      I feel ya. Gentrification is happening all over majority black cities. When I was living in TN a few years ago, I met this lady from Detroit and she was telling me how horrible it was and why she had to move from there. Blight, no job opportunities. It reminded me of New Orleans after Katrina. It’s sad. I would leave too for a better life.

    • Thomas

      I LOVE GENTRIFICATION. I WAS BORN HERE BUT RAISED HERE AND NEW YORK. I HAVE MY COMFORTABLE PLACE DOWN TOWN. I DON’T GIVE A DAMN ABOUT THE NEIGHBORHOOD. AS A YOUNG SINGLE SUCCESSFUL BLACK MAN BEING DEBT, CHILD AND STD FREE.

      I’M ALLOWED TO NOT GIVE A DAMN. IF YOU’RE POOR AND HAVE KIDS WITH MAN MAN AND KESHA ITS’ YOUR RESPONSIBILITY TO RAISE THEM. MY COMMUNITY = MY FRIENDS AND FAMILY. OUTSIDE OF THEM I GIVE NO FUCKS. I DO VOLUNTEER AT A HOMELESS SHELTER ON THE EAST SIDE.

      HOOD NIGGAS WILL BE HOOD NIGGAS. NO ONE IS BEING PUSHED OUT YOU ALL DIDN’T TAKE CARE OF YOUR PROPERTY AND YOU DESERVE WHAT YOU DID.

      NIGGAS HIT THE STRIP CLUB ON 8 MILE TRYING TO BE A “BOSS” WHILE WORKING GM OR FORD FUCK EM.

      IF WE CAN HAVE A BLACK PRESIDENT WE DAMN SURE CAN HAVE WHITE RESIDENTS. FUCK ANYONE LOCALLY OR NATIONALLY WHO DOESN’T AGREE.

      U OF D JESUIT, MOREHOUSE AND U PENN GRAD