Detroit files for Bankruptcy

[TomClash]

Source: NYT

Detroit Files for Bankruptcy
By MONICA DAVEY and MARY WILLIAMS WALSH
Published: July 18, 2013


DETROIT — Detroit, the cradle of America’s automobile industry and once the nation’s fourth-most-populous city, has filed for bankruptcy, an official said Thursday afternoon, the largest American city ever to take such a course.

The decision to turn to the federal courts, which required approval from both the emergency manager assigned to oversee the troubled city and from Gov. Rick Snyder, is also the largest municipal bankruptcy filing in American history in terms of debt.

Not everyone agrees how much Detroit owes, but Kevyn D. Orr, the emergency manager who was appointed by Mr. Snyder to resolve the city’s financial problems, has said the debt is likely to be $18 billion and perhaps as much as $20 billion.

For Detroit, the filing comes as a painful reminder of a city’s rise and fall.

Read more: http://www.nytimes.com/2013/07/19/us/detroit-files-for-bankruptcy.html?hp&_r=0

[TomClash]

1. USA Today

http://www.usatoday.com/story/news/nation/2013/07/18/detroit-prepares-bankruptcy-filing-friday/2552819/

DETROIT -- The city of Detroit filed for Chapter 9 bankruptcy protection in federal court Thursday, laying the groundwork for a historic effort to bail out a city that is sinking under billions of dollars in debt and decades of mismanagement, population flight and loss of tax revenue.

The bankruptcy filing makes Detroit the largest city in U.S. history to do so.

The filing begins a 30- to 90-day period that will determine whether the city is eligible for Chapter 9 protection and define how many claimants might compete for the limited settlement resources that Detroit has to offer. The bankruptcy petition would seek protection from creditors and unions who are renegotiating $18.5 billion in debt and other liabilities.

Detroit Emergency Manager Kevyn Orr, who in June released a plan to restructure the city's debt and obligations that would leave many creditors with much less than they are owed, has warned consistently that if negotiations hit an impasse, he would move quickly to seek bankruptcy protection.

[KamaAina]

2. They needed an emergency manager to do that?

Dave Bing couldn't have done that?

[hack89]

4. Yes. The emergency manager legislation provides executive powers Bing did not have. nt

[KamaAina]

5. At least three cities in California have declared bankruptcy

Vallejo (now emerging from BK), Stockton and San Bernardino. And we have no emergency manager law in CA.

[hack89]

6. Perhaps California has different laws? nt

[movonne]

9. I believe these 3 cities are mosly red areas..

[KamaAina]

21. By California standards, yes

Vallejo not as much as the other two.

[dixiegrrrrl]

8. City worker's pensions and other retirement funds will be wiped out

Except for the Heads of Police and Fire and etc, of course..the city "managers" will come out of this just fine.
The "little people"?
not so much.

[warrant46]

14. Cat Food and Food stamps for the elderly retired

[dixiegrrrrl]

22. Probably not food stamps...

Detroit cut all social services some time ago
and eliminated buses and other services to the poorest areas of the city.
in fact, the City announced ahead of time peope in poverty ravaged areas of Detroit needed to move because services would be cut.

[DallasNE]

12. As Expected, The Emergency Manager

Took the process out of the hands of the negotiator's making one wonder why the fig leaf was even used.

Once Detroit emerges from this process will they be able to turn things around? Not with the Emergency Manager law on the books. Who in their right mind would want to risk an investment that could become worthless once again at the whim of the Governor. Extreme austerity will not allow Detroit to emerge from the ashes either. RIP, Detroit.

[alp227]

3. Detroit Free Press

Detroit files for Chapter 9 bankruptcy amid staggering debts (republished on USAToday.com)

[ZRT2209]

7. Snyder's policies are working

[SleeplessinSoCal]

13. They are actually the Koch Bros policies which Snyder implements as fiat

He's not so much a governor as puppet.

[another_liberal]

19. Exactly!

And ALEC will even write their policies into legislative bills.

[Danmel]

10. this is just so sad

A great American city, gone to ruin. Just a sad sad day for Detroit's people.

[PassingFair]

16. We're the first of this magnitude, we won't be the last.

Lots more big cities gonna fall...

[Danmel]

23. You are probably right

But listening to the residents, who have no street lights, who are afraid to call 911 because there is no one to answer just makes me so sad-I can't imagine having to live like that and try to raise a family. I lived through the fiscal crisis in NYC in the 70s-I was in high school- we had split days because there weren't enough teachers or books or desks. The subways caught fire, the crime was unbelievable, but it didn't get as bad as Detroit is now. The first letter to the editor I ever wrote was when I was 15 and Ford gave NYC the middle finger. I was enraged! My mother told me to write a letter -so I did- to Ford and to the Daily News that had published the iconic "Ford to NY- Drop Dead" headline. How can this nation let a city of 3/4 of a million people go bankrupt? It is lost, like it was on the wrong end of a war. Sad.

[harrose]

11. That's what you get when you have a Repug governor

... and a Democrat city in distress. Snyder would love nothing more than to see Detroit close down and everyone in it starve.

[warrant46]

15. First a Ghetto then a wasteland

[roamer65]

17. Municipal bond insurers are gonna get a bailout of Fed money.

Mark my words...just watch and see.

[another_liberal]

18. The Federal government can give hundreds of billions to bankers . . .

The Federal government give hundreds of billions in taxpayers' dollars to bankers with no strings attached, and let them pay it back in bank stocks and credit default investment instruments (or whatever they call their sleazy crap). But a city of seven hundred thousand Americans can't get a Federal loan to restore basic services?

The American people need to take their country back from complete control by fatcats of the one percent.

[sweetapogee]

25. no expert here

but a loan would only delay what is happening now (and imagine if the day of reckoning comes when a Dem is governor). The only thing that would help is an actual gift of funding. All of our cities in distress should get a gift of funding. As well as free college, free health care, free transportation, free pensions and free housing.

[another_liberal]

26. But for bankers short term help is just fine?

The government should help people really in need, not fatcats who steal from the poor and middle class for a living. If the people of Detroit can only be helped for now, then they should be helped for now. Better yet, though, we should tax bankers equitably and seize their money hidden overseas in tax shelters. If that were done, Detroit could have what it needs long term.

[Eugene]

20. Detroit bankruptcy to last at least a year: emergency manager

Source: Reuters

Detroit bankruptcy to last at least a year: emergency manager

By Deepa Seetharaman
DETROIT | Thu Jul 18, 2013 6:43pm EDT

(Reuters) - Detroit, which filed the largest-ever municipal bankruptcy in U.S. history on Thursday, could complete the process by late summer or fall of 2014, the city's emergency manager said on Thursday.

Detroit Emergency Manager Kevyn Orr was speaking to reporters a few hours after the city filed for Chapter 9 bankruptcy protection. Creditors are expected to mount a stiff challenge to the bankruptcy, which was filed in the U.S. Bankruptcy Court in the Eastern District of Michigan.

(Reporting by Deepa Seetharaman; Editing by Gary Hill)

http://www.reuters.com/article/2013/07/18/us-detroit-bankruptcy-time-idUSBRE96H1G920130718

[quadrature]

24. demolish everything...put in a moose preserve ...

everybody wins!

[cstanleytech]

27. Here is a question for you all.

What do you think that they could or should have done differently to fix the cities problems of people leaving thus shrinking the tax base which forced them into bankruptcy?
Its not like they could have built a wall around the city and then station armed guards on it to keep the people from moving away after all.

[JustABozoOnThisBus]

28. I'm no expert, but have lived in Detroit ...

... I don't know what they could have done, but maybe study how Chicago and Pittsburgh do their "city government" stuff. Pittsburgh has come a long way since the steel mills went overseas.

It's not all bleak. There are some signs of nightlife downtown recently.

[roamer65]

29. Monetize all of Detroit's debt then forgive it.

The Federal Reserve has done it for BILLIONS worth of private company mortgage debt, why not Detroit's?

[Pterodactyl]

30. Yeah, they tried that in East Germany and eventaully that plan failed.

[roamer65]

31. Detroit is the first victim of the massive cuts to revenue sharing...

...by the State of Michigan.

Many Michigan municipalities are trying cope with the cuts, but it was just too much for Detroit to bear. The erosion in revenue sharing began as far back as 2002, but have gotten much worse under Dickie Snyder.

I would not be at all surprised to see Flint to be next in line for bankruptcy.