Detroit files for Chapter 9 bankruptcy [UPDATED: Detroit is Eligible]

this is terribly sad but i'm sure some investors somewhere smell the blood as opportunity!! i wonder if now is a good time to buy buy buy?

It was only a matter of time before the crippled city's legs gave out from underneath it. I feel for the people there and hope that they can get out of there and move onto greener pastures. And at this point any pasture appears to be greener than Detroit.

According to this....

Detroit is still able to 'borrow' money ...

Powers of the Debtor

Due to statutory limitations placed upon the power of the court in a municipal debt adjustment proceeding, the court is far less involved in the conduct of a municipal bankruptcy case (and in the operation of the municipal entity) while the debtor's financial affairs are undergoing reorganization. The municipal debtor has broad powers to use its property, raise taxes, and make expenditures as it sees fit. It is also permitted to adjust burdensome non-debt contractual relationships under the power to reject executory contracts and unexpired leases, subject to court approval, and it has the same avoiding powers as other debtors. Municipalities may also reject collective bargaining agreements and retiree benefit plans without going through the usual procedures required in chapter 11 cases.

A municipality has authority to borrow money during a chapter 9 case as an administrative expense. 11 U.S.C. §§ 364, 901(a). This ability is important to the survival of a municipality that has exhausted all other resources. A chapter 9 municipality has the same power to obtain credit as it does outside of bankruptcy. The court does not have supervisory authority over the amount of debt the municipality incurs in its operation. The municipality may employ professionals without court approval, and the professional fees incurred are reviewed only within the context of plan confirmation.

look under "Powers of the Debtor"

Perhaps they will issue new bonds.

I bet they have a financial outfit ready (like Goldman Sachs maybe).

"New" money ?? "New" crooks at the helm ??

Good. Detroit has been bankrupt for a long time. This should help matters a bit. Hopefully they will have to restructure the government of the city as well. Maybe they won't have anymore "at large" councilpersons.

This is what happens when you have TOO MUCH liberal ideology running the politics of a government.

Originally posted by Helious

The city looks like a war zone, literally.

One of the few moments of brilliance, in an otherwise pretty dumb movie...

Originally posted by HauntWok
Good. Detroit has been bankrupt for a long time. This should help matters a bit. Hopefully they will have to restructure the government of the city as well. Maybe they won't have anymore "at large" councilpersons.

This is what happens when you have TOO MUCH liberal ideology running the politics of a government.

Are you suggesting that "liberal ideology" produces money squandering ?

Or is it just plain corruption.

reply to post by Ameilia

-Trash pick up
-Emergency response like police, fire, and medical
-Road maintenance like potholes filled, red lights operating properly, road signs in place and displaying correct information, and street sweeping/cleaning
-Public transportation, the poorest generally rely on buses the most

They barely did that anyway.

I worked in a scumbag hotel in downtown Detroit, a guy was shot in one of the rooms and it took the police over 3 hours to arrive on the scene, it took an additional hour for the ambulance to finally show up.

Potholes? Detroiters wish they had potholes, if those "potholes" were anywhere else in the world they would be called sinkholes.

And ride DDOT? Safest way to get robbed in the city. Ooh how about the people mover? Or as everyone called it in Detroit "the people mugger"

They might as well just sell the whole place to Windsor as a landfill, it basically is one anyway.

reply to post by xuenchen

Or is it just plain corruption.

In Detroit's case, it's just plain old fashioned corruption. Too much of any ideology is a bad thing, Detroit shows what happens if you have too much of a liberal ideology with absolutely no conservative temperament.

Too little, too late, was done. The City had been run into the ground by successive Mayors and City Councils who kept "kicking the can" down the road, till they ran out of road. It's going to be rough for everyone in the City. The blame falls squarely on the elected officials of Detroit over the last 30 years or so.

I just drove by my street I grew up on for 19 years. yesterday on the way to eat at Mexicantown....I didn't see one habitable home out of the 6 still standing on my old block.

There are vast tracts of Detroit that just need to be bulldozed. It once was a City of over 1.5 Million, now it's lucky to have 700,000 and that's primarily because a lot of them can't get out.

Even now, our City officials are looking for a Federal Bailout, they are totally clueless.

Nuke it and move on. Let it be an example to other cities: be fiscally responsible, keep your city economically and socially sound, or be destroyed. Um...that might take out the whole country. Maybe we should offer the reigns to Canada...or Iceland.

First thought I had was the scifi series continuum. In it in the future the government goes into too much debt and the private sector and corporations bail out the government. Basically they buy out the debt and save the country but in the process take over completely. All branches of government are corporate after that. Scariest scifi scenario I've seen in a long time.

reply to post by PsykoOps


Yeah, that's a good show and terrible because its showing what happening now, corporate law. Quite scary indeed. The good guys are the bad guys.

Originally posted by PsykoOps
First thought I had was the scifi series continuum. In it in the future the government goes into too much debt and the private sector and corporations bail out the government. Basically they buy out the debt and save the country but in the process take over completely. All branches of government are corporate after that. Scariest scifi scenario I've seen in a long time.

Many people think that's already been happening but in a different way.

They buy the politicians before they go broke.

Just think about how many banks and insurance companies own government bonds.

Private companies do too.

Originally posted by madmac5150
Looks like progressive politics is a rousing economic success... Detroit has been run by the progressives and labor unions for a very long time. Look to them to restore hope and change in the Motor City...

Man, my sarcasm meter is pegged today...

republicans have controlled the entire state since 2010, what a fine job they have done
the state senate of Michigan has had a republican majority since 1983.

here's a simple graph with colors, for all you people that don't do research.
www.flickr.com...

I'll crap my pants if a company called OmniCorp buys the city. Maybe Robocop is actually prophetic...

Some cities are not worth saving no matter how much some think they are.
MI Crime Map

TheStar.com
A number of factors — most notably steep population and tax base falls — have been blamed on Detroit’s tumble toward insolvency. Detroit lost a quarter-million residents between 2000 and 2010. A population that in the 1950s reached 1.8 million is struggling to stay above 700,000. Much of the middle-class and scores of businesses also have fled Detroit, taking their tax dollars with them.

as for worker pensions:

freep.com
Detroit’s two pension funds on Wednesday sued emergency manager Kevyn Orr and Gov. Rick Snyder in an attempt to block Orr from slashing pension benefits for thousands of current and active city workers as part of his plan to restructure the city’s massive debt. The lawsuit asks the Ingham County Circuit Court to declare that Snyder cannot authorize Orr to take any actions — including filing for municipal bankruptcy — that would cut pension benefits, which the lawsuit says are protected by the state constitution.

reply to post by jimmyx


The state of Michigan is not bankrupt... the city of Detroit is.

reply to post by jimmyx


Well then WHO exactly has been running Detroit ?

Republicans ?

Is Michigan as a State in some kind of financial trouble too ?

reply to post by seabag


Well, if it actually helps ti city...that would be great.
The bondholders are already crying that they should be considered secured...that would leave the employees and retirees as the bottom of the heap for whatever is left over.

You know, the little people....with the most to lose.
The clerks who man the phones, the retirees who put in their time.
The patrol cop...the fireman...the EMS worker.

I have yet to hear ONE WORD about all the delinquent taxpayers...all the delinquent water bills that citizens of the city owe.
All the unpaid penal fines.
Parking tickets.
The list goes on and on.

Does the city need to own an antique car collection?
How about billions in artwork....most of which is never seen.

reply to post by tothetenthpower


Grab your popcorn...pull up a chair....history is being made as this is the largest municipal bankruptcy in history.

DontTreadOnMe
reply to post by tothetenthpower

 

Grab your popcorn...pull up a chair....history is being made as this is the largest municipal bankruptcy in history.

I expect that this might launch a national conversation regarding the economy again and what to do with troubled cities like Detroit.

IMO they should make the auto industry pony up. Pipe dream I know .

Either way, this is going to change things.

We might see America's first Corporate Controlled City.

~Tenth