OT: Detroit files for bankruptcy
Feel free to lock this thread (would probably be a good idea), but it will be posted ad nauseum if it's not up.
Detroit has filed for bankruptcy.
http://finance.yahoo.com/news/detroit-emergency-manager-files-bankruptcy-201540926.html
yep i was right. just a couple hours early.
was 7 years early with this article:
http://www.theonion.com/articles/detroit-sold-for-scrap,1931/
I think the question on all our minds at this dark moment is obvious. What effect will this have on the Cass Tech pipeline?
Seriously, though, sorry Detroiters. This seems like the only chance to ever recover, so there are better days down the road a few years.
I find it interesting that New York got bailed out by the federal government in the 70s, yet I haven't heard a thing about federal assistance for Detroit. I'm not saying Detroit deserves federal assistance to pay their debts, but it is a sign of different times...
Interesting how over a million people left New York before they got their bailout and the city was widely regarded as being in decline. It's a shame that they never ever recovered.
Other than that I don't how a city twice the size necessary can recover without forced reconsolidating.
the cost of financing will just go up.
I have a hard time believing that a buisness savvy family like the Ilitches didn't see this coming. I'm sure they've got a way to make the project move forward regardless.
I'm not in favor of the public paying anything for athletics anyway...
The Wings arena was funded entirely by private, state and captured DDA funds. Not going to be affected at all.
before an Ingham County judge was to hold a hearing for the pension funds representatives.
Dirty business all around
A Bankruptcy filing would make anything decided in a state court moot.
You can't enjoin someone from invoking a federally-created right/priviledge/whatever.
The one exception might be if they got an injunction preventing an EFM from taking any action on grounds that the appointment of the EFM was invalid or the exercise of his powers on behalf of the city would violate state law. In other words, they can't prevent DETROIT from filing bankruptcy, but they can challenge the Emergency Financial Manager's powers to file on BEHALF of Detroit. But that's a crazy-ass rabbit hole.
I agreed with this elsewhere, but Chapter 9 is a funny animal... there is no doubt that a state court could not enjoin an individual or a corporation from seeking the appropriate bankruptcy protections (Chapters 7,11,13, etc; I wrote another reply elsewhere about that, see Donovan v City of Dallas), but then there is this very funny thing about Chapter 9:
Section 109(c) of the Bankruptcy Codes sets forth four additional eligibility requirements for chapter 9:
- the municipality must be specifically authorized to be a debtor by state law or by a governmental officer or organization empowered by State law to authorize the municipality to be a debtor;
In some states, there is no law to enable municipalities to file Chapter 9 (see, eg, Rhode Island and Central Falls, RI). They instead go into state receivorship.
In other words, a state has to allow a municipality to file (it's due to the Tenth amendment).
So... I'm sure that someone (ie, pension board) would make a not-automatically-dismissable claim that a state court could enjoin the state from authorizing the Chapter 9 filing.
Lots of very interesting legal issues in this case.
The pension fund people were just stalling the inevitable process anyway. Just like every other group who stands to lose out in these proceedings, they didn't listen to the EFM and chose not to rework their costs....So while the 5 minute thing was a little shady, it's for the best.
Very few people want to relocate to Detroit (or even Michigan for that matter) from out of state. For the young people from the area that do want to stay in the greater Detroit area, there aren't enough jobs to keep them. It's a shrinking city.
When I finished graduate school, I looked for jobs in Detroit and Michigan and there weren't any jobs in my specific field of choice. Years later, I got job offers to come back, with less growth opportunity and at significantly lower pay. I didn't seriously consider moving back at all.
The place where I ultimately settled and bought a home (out of state) has extremely good public schools, public transportation, parks, libraries, etc. Bottom line: you want to have a city that attracts people that are happy to pay high property taxes.
This was completely predictable, as was the auto industry collapse. You didn't have to be THE_KNOWLEDGE to predict it, either. I remember vividly sitting in my parents' living room as a 14-year-old kid in the 80s, reading the Detroit News, thinking, "What the hell are they doing? This can't go on."
Things that can't go on, don't.
There are plenty of parallels today but I suppose that is getting into politics, so, hey, about that game on Sunday... over/under on Brek Shea minutes is at 12. I'm taking the under.
I resemble that remark, as they say! It's so hard to watch Detroit struggle. Likewise, it's hard to watch us collectively struggle nationally.
It's hard to comment on a thread like this without getting political, but it seems to me that our basic problems (micro and macroeconomically) stem from the propensity of politicians to curry favor and promise the moon to get elected and stay in power thereby handing the deleterious ramifications of their political promises to the next generation to deal with as best they can.
Welcome one and all to the "next generation." Quick, run to Staples and buy an "Easy" button to fix these fine messes!
And look forward to moving there once I'm done with the military.I believe the city will provide the services I need at that time. And if not, that day will be even sadder than today. Today hurts, but to pass through this process without getting better from it would far more painful to witness.
Otherwise not much will help the math on this one. The days of federal bailouts are waning.
I would hate to be US Bank right now. Of the top 20 creditors, all but 3 are US Bank-held funds. Ruh roh