City of Detroit Files for Bankruptcy

[BetteDavisEyes]

December 3, 2013 at 1:14 pm

Detroit bankruptcy eligibility ruling

Rhodes' opinion on pensions will have national repercussions

In a single ruling, U.S. Bankruptcy Judge Steven Rhodes overturned a 50-year belief that vested public-sector pensions are protected by the state constitution under Chapter 9 and allowed the largest municipal bankruptcy in American history to proceed.

Rhodes’ ruling on pensions, certain to be appealed, will reverberate nationwide. With cities, even states, grappling with ballooning unfunded pension liabilities, there are growing concerns that the obligations promised to public-sector retirees associated with municipalities could be discharged in Chapter 9 bankruptcy.

The decision, among others in the 140-page opinion, clears the way for Detroit Emergency Manager Kevyn Orr to propose a “Plan of Adjustment” expected to mirror a June proposal to creditors that envisioned exchanging $11.5 billion in unsecured creditor claims for pro rata shares in a $2 billion note...

From The Detroit News: http://www.detroitnews.com/article/20131203/METRO01/312030079#ixzz2mRBE8XOW

 

[gitana1]

December 3, 2013 at 1:14 pm

Detroit bankruptcy eligibility ruling

Rhodes' opinion on pensions will have national repercussions

In a single ruling, U.S. Bankruptcy Judge Steven Rhodes overturned a 50-year belief that vested public-sector pensions are protected by the state constitution under Chapter 9 and allowed the largest municipal bankruptcy in American history to proceed.

Rhodes’ ruling on pensions, certain to be appealed, will reverberate nationwide. With cities, even states, grappling with ballooning unfunded pension liabilities, there are growing concerns that the obligations promised to public-sector retirees associated with municipalities could be discharged in Chapter 9 bankruptcy.

The decision, among others in the 140-page opinion, clears the way for Detroit Emergency Manager Kevyn Orr to propose a “Plan of Adjustment” expected to mirror a June proposal to creditors that envisioned exchanging $11.5 billion in unsecured creditor claims for pro rata shares in a $2 billion note...

From The Detroit News: http://www.detroitnews.com/article/20131203/METRO01/312030079#ixzz2mRBE8XOW

That's scary to me. People enter into a contract when They accept a position and bank on that. These people didn't contribute to social security because they contributed to a pension fund. They may have saved more if they didn't have the guarantee of pensions. To cut the pensions of such a vast amount of people would likely make our economic crisis spin out of control again.

Detroit. What a mess. Legions of corrupt government officials who destroyed the city, most of whom got away with it only to leave old people to bear the brunt of the corruption. That's horrible.

Btw, did anyone see Anthony Bourdain's season finale in Detroit? It was a masterpiece. I watched it 3 times. Gorgeous. It created such a sense of hope admist the ruin. The people there are very tough, resilient and self-sufficient.

 

[AzPistonsGirl]

Btw, did anyone see Anthony Bourdain's season finale in Detroit? It was a masterpiece. I watched it 3 times. Gorgeous. It created such a sense of hope admist the ruin. The people there are very tough, resilient and self-sufficient.

RSBM: I saw it and recorded it and commented on some other thread about it. I'll admit - it made me nostalgic for my home town, but I think it made Detroit look pretty bad when it didn't have to do that. So much good that he didn't/couldn't cover. And at the start of the show he said something like (wildly paraphrasing) there is no coming back for Detroit... then toward the end he said it could come back. I have been saying ti will come back since I left 20 years ago... and yet... it hasn't. I still have hope and love for my city and may return there to stay one day.

Just interesting that we had different takes on the show. (and OT - I read news that the Packard plant is in the midst of possibly being sold to an auto parts manufacturer? It must be just the land - and not of all it, right? It is HUGE and there is nothing but a rotted shell... I was thinking it would be cool to say you have a business on what used to be the old Packard plant, but come on... Packard? Packard was a failure and virtually unheard of in the vernacular of today's youth.)

But I agree about those folks who will lose or have their pensions drastically reduced. So sad... and so unjust.

Thanks for letting me ramble. =) It is good to know that some watchers of the show saw something beautiful!

 

[Peliman]

Here are some among a plethora of facts Rhodes cited in court Tuesday:

Detroit has about 78,000 abandoned buildings; 38,000 are deemed dangerous.
The city reports 11,000 to 12,000 fires a year, about 60 percent in blighted or unoccupied buildings.
The average police response time to a priority 1 call in 2012 was 30 minutes, 58 minutes in 2013. The national average is 11 minutes. (Police Chief James Craig disputes these figures and says they are inflated by improper data analysis.)
During the first quarter of 2013, frequently only 10-14 of the city's 36 ambulances were in service.
Unemployment in June of 2000 was 6.3 percent in Detroit. It was 23.4 percent in 2010 and 18.3 percent in 2012.
In 2012, 136,000 crimes were reported in the city. Of these, 15,200 were violent. The city's clearance rate for violent crimes was 18.6 percent, 'substantially' less than the national average and in neighboring communities.
In April 2013, about 40 percent of the city's 88,000 street lights were not working.
Detroit's population, projected near 684,000 in Dec. 2012, is just 37 as large as it was in 1952, when the population peaked near 1.85 million.
In 2013, 39 percent of the city's revenue was spent to service "legacy liabilities." That figure is projected to increase to 65 percent within five years at the current rate
Detroit operated at a general fund deficit for seven straight years, 238 million in 2013.
The city would have run out of cash in June of 2013 had it not deferred $120 million in pension payments and borrowed $30 million previously the same year.
At current rate, the city is projected to run a cash flow deficit of $190 million in 2014, $346 million by 2017.
For five years ending in 2012, the general pension payments $1.7 billion less tan it paid out. The Police and Fire pension raised $1.6 billion less than it paid.
Detroit reduced the number of city employees by 2,700 in 2011 to 9,560 in May.
City software is obsolete and not integrated between or within departments.

http://www.mlive.com/news/detroit/index.ssf/2013/12/12_alarming_statements_from_ju.html

 

[gitana1]

RSBM: I saw it and recorded it and commented on some other thread about it. I'll admit - it made me nostalgic for my home town, but I think it made Detroit look pretty bad when it didn't have to do that. So much good that he didn't/couldn't cover. And at the start of the show he said something like (wildly paraphrasing) there is no coming back for Detroit... then toward the end he said it could come back. I have been saying ti will come back since I left 20 years ago... and yet... it hasn't. I still have hope and love for my city and may return there to stay one day.

Just interesting that we had different takes on the show. (and OT - I read news that the Packard plant is in the midst of possibly being sold to an auto parts manufacturer? It must be just the land - and not of all it, right? It is HUGE and there is nothing but a rotted shell... I was thinking it would be cool to say you have a business on what used to be the old Packard plant, but come on... Packard? Packard was a failure and virtually unheard of in the vernacular of today's youth.)

But I agree about those folks who will lose or have their pensions drastically reduced. So sad... and so unjust.

Thanks for letting me ramble. =) It is good to know that some watchers of the show saw something beautiful!

Let me tell you, watching that program made me want to go there and I never have had Detroit as a destination before. To me, it showed the absolute beauty of the city and I don't just mean those stunning homes. I mean the people. I am actually planning a trip!!!!!

 

[AzPistonsGirl]

Let me tell you, watching that program made me want to go there and I never have had Detroit as a destination before. To me, it showed the absolute beauty of the city and I don't just mean those stunning homes. I mean the people. I am actually planning a trip!!!!!

that's so awesome gitana1! The city really is amazing - so many old buildings with such history. What I miss the most? The people. I was there in September and came back to sterile Arizona saying "why aren't people here as nice as they are in Detroit?" Humble people, hard working indeed. BDE will give you some suggestions of places to see I bet! Lots to see!

 

[gitana1]

that's so awesome gitana1! The city really is amazing - so many old buildings with such history. What I miss the most? The people. I was there in September and came back to sterile Arizona saying "why aren't people here as nice as they are in Detroit?" Humble people, hard working indeed. BDE will give you some suggestions of places to see I bet! Lots to see!

I'm excited. We're also going to Chicago and to see a friend who lives in Michigan (but closer to Chicago than Detroit). We might go to Cleveland if we have time.

I have my bachelor's in American Studies so anything about American history or culture is fascinating to me. The people are a huge draw, though. I loved the lawn mower brigade!!! They just dig in and take care of business when the government fails them. Awesome. And the small off
The grid businesses that the people create? The street side BbQ joint? The El Salvadorean food house? And the gourmet restaurant housed in a commercial garage off an alley? How frickin cool is that!

Despite having every reason to complain, not one of the people featured did. Super tough and super hope-filled. Finding beauty in the ghost gardens instead of crying at the tragedy of them. Leaving a lucrative position to come back to a city most people think is dead, and starting a business there. Incredible. If any city can recover, it's that one.

P.s. I think people from Detroit didn't like the finale so much and tended to see the negatives because they are so familiar with all the good stuff not shown. But those unfamiliar with it saw it very differently- poetic, inspirational and gorgeous. (I went on line after watching it and read/tracked many comments).

 

[BetteDavisEyes]

Detroit Institute of Arts statement on Detroit's bankruptcy filing

Published On: Dec 03 2013 12:17:31 PM EST

DETROIT -
The Detriot Institute of Arts (DIA) supports the Emergency Manager's efforts to address the City's current financial crisis.

The DIA hopes that Judge Rhodes' ruling today, which confirms that the City is eligible to proceed in its Chapter 9 bankruptcy case, will lead to a quicker and more effective resolution of the crisis...

http://www.clickondetroit.com/money...ling/-/1719116/23262296/-/6snqpm/-/index.html


December 4, 2013 at 2:48 pm

Read Christie's preliminary report

Detroit-bought art at DIA worth between $452M and $866M

Serena Maria Daniels and Michael Hodges/The Detroit News

Detroit — In a preliminary report, New York-based auction house Christie’s Appraisals estimated the fair market value of city-purchased works at the Detroit Institute of Arts to be between roughly $452 million and $866 million.

Altogether, the auction house is examining 2,781 works both on display and in storage. Just 11 of those, the Christie’s statement noted, account for 75 percent of its total estimate.

Christie’s announced Wednesday that it had delivered its preliminary report to Detroit Emergency Manager Kevyn Orr, one day after U.S. Bankruptcy Judge Steven Rhodes confirmed Detroit’s eligibility for bankruptcy protection. Full details of its findings and proposed alternatives to a sale will be presented to Orr the week of Dec. 16, the auction house said...

From The Detroit News: http://www.detroitnews.com/article/20131204/METRO01/312040064#ixzz2mXOU43zb

Having grown up in Detroit, I have enjoyed many visits to the DIA, and I have fond childhood/teen memories of dancing (ballet) in the site's auditorium. I've visited many major art museums and know firsthand that the DIA boasts some of the world's finest collections, most notably the Dutch/Flemish paintings, Egyptian artifacts, and medieval suits of armor. It would be a shame to lose all or part of the DIA's magnificent works of art. :moo:

 

[Only4Justice]

Let me tell you, watching that program made me want to go there and I never have had Detroit as a destination before. To me, it showed the absolute beauty of the city and I don't just mean those stunning homes. I mean the people. I am actually planning a trip!!!!!

Gitana. Detroit is full of wonderful people. Although I am somewhat biased because my roots are from Detroit, I have lived all over the US, some of the nicest people I have met and best times of my life were in this area. Thanks


Sent from my iPhone using Tapatalk

 

[BetteDavisEyes]

Found this on The Weather Channel website. Photos of abandoned buildings/homes in Detroit. The architecture in the city has always been amazing.

http://www.weather.com/travel/modern-ruins-abandoned-detroit-photos-20130715

 

[gitana1]

Found this on The Weather Channel website. Photos of abandoned buildings/homes in Detroit. The architecture in the city has always been amazing.

http://www.weather.com/travel/modern-ruins-abandoned-detroit-photos-20130715

They were calling this "ruin " on the Bourdain show. I think there IS a haunting beauty in the abandoned buildings. But it's a real shame. And also scary how quickly traces of human beings can disappear.

 

[Reader]

Millionaire to give $5M toward protecting DIA art and Detroit pensions; who's next?

http://www.freep.com/article/20131206/NEWS01/312060034/Detroit-bankruptcy-pension-foundation-Schaap

A local philanthropist said Thursday he’ll donate $5 million toward protecting the Detroit Institute of Arts’ renowned collection and city retirees’ pensions — and he hopes to inspire others to give.

Millionaire A. Paul Schaap said he plans to meet today with U.S. Chief District Judge Gerald Rosen, who is serving as mediator in Detroit’s bankruptcy case. Rosen has been trying to persuade at least 10 charitable foundations to put up $500 million to spin off the DIA from the city, which could then use the money to reduce pension cuts and improve services.

“I have to believe there are more of us out there who want to do something and didn’t quite know how to approach it,” Schaap said.

More at link....

 

[BetteDavisEyes]

December 16, 2013 at 11:23 am

Detroit bankruptcy judge allows appeal of eligibility, pension rulings

Robert Snell and Chad Livengood /Detroit News Lansing Bureau

Detroit — A bankruptcy judge Monday allowed creditors to appeal his recent eligibility and pension rulings directly to the U.S. 6th Circuit Court of Appeals.

The decision by U.S. Bankruptcy Judge Steven Rhodes followed several requests from unions, pension funds and retiree groups, who are fighting the city’s eligibility for Chapter 9 bankruptcy relief and the judge’s ruling that pensions can be cut in bankruptcy court.

Creditors pushed for an expedited appeal, arguing the bankruptcy case has implications on the treatment of vested pensions by bankrupt municipalities nationwide. Rhodes did not immediately rule on the expedited request...

From The Detroit News: http://www.detroitnews.com/article/20131216/METRO01/312160055#ixzz2nf1JdNn0

 

[michmi]

Btw, did anyone see Anthony Bourdain's season finale in Detroit? It was a masterpiece. I watched it 3 times. Gorgeous. It created such a sense of hope admist the ruin. The people there are very tough, resilient and self-sufficient.

I also recorded it and have watched it multiple times. I knew he would do a good job with Detroit because Anthony Bourdain likes REAL places with REAL people. Another big plus was he got Charlie LeDuff to squire him around - everyone inside and outside the city knows him, some think he's a jerk, I happen to think he just says it like it is (and he's a flawed human being like the rest of us). I couldn't think of a better person to show off the city. Great show.

 

[Blondie in Spokane]

http://www.dailymail.co.uk/news/art...takes-office-big-challenges-little-power.html

"Detroit's first white mayor in 40 years takes office in bankrupt city"

 

[BetteDavisEyes]

JUDGE APPROVES DETROIT EXIT FROM BANKRUPTCY

Robert Snell, The Detroit News 1:35 p.m. EST November 7, 2014

Detroit — A judge Friday approved Detroit's plan to shed $7 billion in debt, a plan that includes cuts to retiree pensions and other obligations considered unthinkable before the city filed for bankruptcy last year.

The approval by U.S. Bankruptcy Judge Steven Rhodes pushes Detroit near the end of the biggest municipal bankruptcy case in U.S. history. His decision comes 15½ months after Detroit filed a bankruptcy petition triggered by population loss, a dwindling tax base, corruption, mismanagement and financial problems.

Rhodes acknowledged retirees and the pain they will experience in the wake of Detroit's bankruptcy case and pension cuts...

http://www.detroitnews.com/story/ne...2014/11/07/detroit-bankruptcy-trial/18642961/

 

[TrackerSam]

I think the thing that bothers me most is those poor people who worked for the city for so many years and now their pensions are in jeopardy. Imagine being a police office in Detroit for 30 years (not an easy job, no doubt) and now you don't know if you have anything to live on. So sad.

I agree (even though I'm not American, so my opinion really doesn't count for anything) that the federal government shouldn't step in. If they did, then all municipalities would/could go hog wild on spending, with no concern about risk.

I hope the people of Detroit can stand with their heads held high. That city was great in its day, and there are so many wonderful people that call it home. If only it could rise again to live another day.

But those same union members refused to compomise even a little. This is the very thing Scott Walker was trying to prevent in Wisconsin and it's happeneing in Chicago. The state and city unions have to renegotiate or better yet, be broken. IMO.

 

[Nova]

I've never heard of a city actually going bankrupt - I know they've cut services but would the federal gov't step in and bail them out?

I don't know. New York City was on the verge of bankruptcy in the 1970s, but came back stronger than ever. I'm not saying that will happen in Detroit, but the situation isn't necessarily hopeless.