bankruptcy

Stateside
12:42 pm
Tue October 7, 2014

Where do things stand with Flint and a possible bankruptcy? A lot riding on a lawsuit

Credit Steve Carmody / Michigan Radio

A recent analysis by Moody's Investor's Service offers the prediction that Flint will not follow along the bankruptcy path set by Detroit.

Even though the two cities share many of the same problems and challenges, Moody's believes bankruptcy is not in the cards for Flint.

John Pottow is a University of Michigan law professor and a bankruptcy expert. Pottow also says bankruptcy is unlikely for the city right now, because he believes Flint actually has a long term term plan of meeting a balanced budget since a state-appointed emergency manager was appointed several years ago.

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Opinion
11:54 am
Wed September 10, 2014

What happens as Detroit begins to fight its way back to prosperity

Well, yesterday was indeed one of the more momentous days in Detroit’s modern history. The city not only reached an agreement with Syncora, the major opponent of its bankruptcy filing. Detroit also reached a deal with the suburbs on the water system, something that has eluded everyone for years.

When I heard about all this, I was instantly reminded of economist Paul Romer’s famous quote: “A crisis is a terrible thing to waste.” Detroit is in its worst crisis since Cadillac beached his canoes and scrabbled up the riverbank in 1701.

And for once, it hasn’t wasted it. Whatever you think of Federal Bankruptcy Judge Steven Rhodes and Detroit emergency manager Kevyn Orr: This would not have happened without them. Rhodes is the real hero in the water settlement.

Oakland County Executive L. Brooks Patterson acknowledged this yesterday. For more than 40 years, Patterson has had a political career based on bashing Detroit. He had no intention of ever agreeing to a water deal with the city.

But Patterson knew that if he wasn’t willing to play ball, Rhodes could, quote, “cram down our throats his settlement of this issue, and this was always looming over our heads.”

The settlement itself is reasonable, logical, simple, and could have been designed by a graduate class in political science. A new Great Lakes Water Authority is being created.

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Politics & Government
5:31 pm
Fri August 29, 2014

Filings in Detroit's bankruptcy are getting personal

Turns out federal judge Stephen Rhodes can write a piece of legal smack down when he wants.
Credit John Meiu / Detroit Legal News Publishing LLC

A recent order from the court reads like a Facebook argument.

It started with Syncora, a major bond insurer that claims Detroit owes it more than a billion dollars.

The company filed an objection to the “grand bargain” that’s been coming together to save the Detroit Institute of Arts and protect the city’s pensioners.

Basically, Syncora says it and other Wall Street creditors are getting treated like the bad guys, while the DIA and the pensioners are clearly the hometown favorites.

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Stateside
4:33 pm
Thu May 29, 2014

GM approaches 5 years since bankruptcy

Credit John F. Martin / Creative Commons

At 8 a.m. on June 1, 2009, General Motors filed for Chapter 11 reorganization. That filing in the bankruptcy court in Manhattan was the start of a painful and historic journey for General Motors. 

Five years later, after a massive government equity investment, General Motors is doing well, although it has been rocked recently by the ignition switch recall controversy, and a blizzard of other recalls. 

Let's take stock of what GM has done in the last five years, and see if the prevention of job and income losses was worth the cost to taxpayers. 

Sonari Glinton is NPR's business reporter, and he joined us on Stateside. 

*Listen to the full interview above. 

Law
8:18 pm
Mon May 19, 2014

Building unions OK giving to Detroit retiree costs

On Monday, U.S. District Court released a statement from bankruptcy mediators saying that the Michigan Building and Constructions Trades council "will be participating in the so-called `grand bargain' by making material contribution toward health care costs for Detroit's retirees."
Credit Steve Carmody / Michigan Radio

LANSING, Mich. (AP) - Mediators in Detroit's federal bankruptcy case say that building trade unions have agreed to contribute to a fund to cover retirees' benefits.

Some legislative Republicans have made union contributions to the pensions a condition for state aid, designed to protect the Detroit Institute of Arts' collection from sale to cover the costs.

A state House committee is to vote Tuesday spending $195 million to help Detroit emerge from bankruptcy.

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Politics & Government
1:32 pm
Mon May 19, 2014

The 'Grand Bargain' may see progress this week at the state capitol

Governor Snyder hopes the State House will make progress toward approving the ‘Grand Bargain’ this week.

Critics complain it’s not fair for the rest of the state to pay for Detroit’s financial missteps. Supporters say restoring Detroit to financial health is important to all of Michigan.Credit Steve Carmody / Michigan RadioEdit | Remove

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Auto
6:26 pm
Tue January 14, 2014

General Motors' quarterly dividend is back

General Motors (file photo)
Steve Carmody/Michigan Radio

DETROIT (AP) - General Motors Co. says it will resume paying a quarterly dividend, its first since the height of the financial crisis in 2008

The U.S. automaker's CEO Dan Akerson had hinted that a dividend may be coming and the company confirmed the move Tuesday. General Motors says its dividend of 30 cents per share is payable March 28 to stockholders of record as of March 18.

The Detroit-based company says investors should share in the company's success and that the dividend is a signal of confidence for a profitable future.

Law
2:56 pm
Mon December 16, 2013

Judge rules that his Detroit bankruptcy finding can be directly appealed

John Meiu Detroit Legal News Publishing LLC

The judge in Detroit’s bankruptcy case says creditors can appeal his recent eligibility ruling directly to a higher federal court.

Judge Steven Rhodes ruled earlier this month that Detroit is eligible to proceed with its historic bankruptcy case.

He also ruled that city pensions can be cut in federal bankruptcy court — despite a public pension guarantee in Michigan’s state constitution.

City unions, pension funds and retiree groups immediately said they intended to appeal both decisions.

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Stateside
4:47 pm
Thu December 5, 2013

Will the DIA survive Detroit's bankruptcy? A Detroit News columnist shares his thoughts

The Detroit Institute of Arts.
Flickr

What’s going to happen with the Detroit Institute of Arts?

 

That’s the question on the minds of many Michiganders after the city of Detroit was deemed eligible for Chapter 9 bankruptcy on Tuesday.

Daniel Howes, a business columnist with The Detroit News, talks with us about all things DIA – a recent appraisal of the institute’s collection, emergency manager Kevyn Orr’s interest in the museum, and a possible rescue plan cooked up by a federal judge.

Listen to full interview above. 

Stateside
4:37 pm
Thu November 21, 2013

How do cities get in a 'death spiral,' and how can we stop it?

In July, Detroit became the largest city to file for bankruptcy in U.S. history.
Bob Jagendorf Flickr

Ever since Detroit’s became the biggest in American history to seek bankruptcy protection, the term “death spiral” has been in the spotlight.

The spiral often begins with promises made to municipal workers. Pensions and health coverage are becoming too much for many cities and states to bear. But the law tells mayors and governors that those pension plans need to remain intact.

As pension costs mount, they try raising taxes, or turning to the municipal bond market. And when those doors are slammed shut, what happens? Essential services get cut, pink slips start flying, and businesses and homeowners get out of town, leaving behind a smaller and poorer population even less able to cover a city’s soaring costs.

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Politics & Culture
5:02 pm
Mon November 18, 2013

Stateside for Monday, November 18th, 2013

When we talk about Detroit's bankruptcy filing, the point seems to almost always be made that this is historic. That Detroit is the largest city in U.S. history to seek bankruptcy protection. But, that was almost not the case. In the mid 1970's New York City was on the brink of financial crisis. On today's show: What can Detroit learn from New York's comeback?

And, as of today, the University of Michigan Hospitals and Health Centers will no longer sell sugar-sweetened drinks. It's a not-too-subtle push to get healthy, but is it taking away our choice as a consumer? Is it going too far?

Also, the Michigan Women's Hall of Fame has just announced its latest list of inductees. We took a closer look at one of these influential Michigan women.

First on the show, Republicans in Lansing are split over whether people who bankroll so-called “issue ads” should be allowed to remain anonymous.

Issue ads attack or support politicians or causes without using what are called “magic words" like “vote for” or "oppose." Unlike campaign ads, the money behind issue ads can be anonymous.

But, late last week, Michigan Secretary of State Ruth Johnson proposed new rules that would require disclosure of issue-ad donations.

Johnson said, too often, issue ads are just thinly disguised political ads, and people should know who is paying for them.

But, many Republicans disagree. In fact, within hours of Johnson's proposal, the GOP-led Senate acted quickly to amend a campaign finance bill that would make Johnson's new rules illegal.

Rich Robinson, Executive Director of the Michigan Campaign Finance Network, and Jonathan Oosting, Capitol reporter for MLive.com, joined us today.

Stateside
5:02 pm
Mon November 18, 2013

Detroit almost wasn't the largest city to file for bankruptcy

Peter Martorano Flickr

In virtually every discussion and report about Detroit's bankruptcy filing, the point is made that this is historic. That Detroit is the largest city in U.S. history to seek bankruptcy protection.

But, that nearly was not the case. New York City was a hairs-breadth away from earning that unenviable distinction in 1975.

We wondered what comparisons could be made between Detroit's crisis today and New York's in the 70's, and if there are lessons Detroit could learn from New York's recovery.

Out next guest has taught at Yale for 46 years, he was part of five New York City governments and he is a noted urban planner, educator and author of The Planning Game: Lessons from Great Cities and The American City: What Works, What Doesn’t.

Alex Garvin joined us today from New York City.

Listen to the full interview above.

Stateside
4:20 pm
Thu November 14, 2013

Could a private fund save both the DIA and public pensions?

The Detroit Institute of Arts
Flickr

If anything’s clear coming from Detroit’s bankruptcy case it is this: the city needs new solutions.

Daniel Howes, Detroit News business columnist, wrote his column today on a proposal from Chief U.S. District Judge Gerald Rosen. Rosen is proposing a new private fund that could have a major impact on the future of the Detroit Institute of Arts, the city’s retired workers and bankruptcy proceedings.

Listen to the full interview above.

Business
3:36 pm
Wed November 6, 2013

Blockbuster goes bust, stores closing in Michigan

A hand written 'Closed' sign is pasted in the window of a former Blockbuster video store in Jackson, Michigan
Steve Carmody/Michigan Radio

Michiganders who still like to browse video store shelves will soon lose one of the few outlets left.

The last Blockbuster video stores in Michigan will soon close.

For many Michiganders, there was a time when a trip to their neighborhood Blockbuster was a big part of their weekend plans.

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Politics & Government
3:29 pm
Thu August 8, 2013

If Detroit's in bankruptcy court, why isn't Flint too?

Downtown Flint, Michigan (file photo)
Steve Carmody/Michigan Radio

With all the talk about Detroit’s path into bankruptcy court, some people have been asking why hasn’t Flint gone the same route?

Like Detroit, Flint’s city finances have been a mess for a long time.

Governor Snyder not only appointed an emergency manager to run Flint, he did so more than a year before he appointed one in Detroit.

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Opinion
9:02 am
Tue July 30, 2013

Spending taxpayer dollars on sports stadiums will not help Detroit

Politicians are falling all over themselves in Washington and in Lansing to oppose spending any money to, as they put it, “bail out” Detroit.

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Stateside
5:26 pm
Mon July 29, 2013

How does Detroit compare to other bankrupt cities?

Stockton, California is the former largest city to file for bankruptcy.
Wikipedia

It's been just over a week since Detroit became the largest city in American history to file for bankruptcy protection under Chapter 9.

Until now, that unwanted distinction belonged to Stockton, California.

Earlier this year, Bridge Magazine writer Ron French wrote an article about his visit to bankrupt Stockton and Vallejo, a California town that has emerged from bankruptcy.

As Ron puts it, if Stockton is an example of a city just being diagnosed with fiscal "cancer," Vallejo is a community that has finished chemotherapy. And so far nobody seems particularly thrilled with the results.

Ron French joined us today. 

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Law
6:09 pm
Thu July 25, 2013

Five cities that were denied Chapter 9 protection in the past

Chapter 9 was denied to five cities; could the same thing happen in Detroit?
Bernt Rostad creative commons

Everyone is waiting to see how Detroit's historic bankruptcy filing plays out in court. Though Detroit is the largest city to ever file for bankruptcy, other cities have done it.

But, while some have been granted protection under Chapter 9, other cities were denied protection, or never even got to court.

More specifically: Bridgeport, Connecticut; Hamtramck, Michigan; Washington Park, Illinois; Boise County, Idaho and Harrisburg, Pennsylvania. 

There are basically two reasons that these cities weren't granted protection: the federal bankruptcy court deemed that they had enough money to cover their debt for the fiscal year, or that they simply didn't have the authority to file for Chapter 9.

Here's a breakdown of what happened to them, and why the court ruled the way it did:

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Business
4:26 pm
Thu July 25, 2013

Detroit-Windsor Tunnel operator files for bankruptcy

The Detroit-Windsor Tunnel
Flickr user jpowers65 Flickr

The Detroit-Windsor Tunnel, the underwater highway that connects the U.S. to Canada, could be in trouble.

American Roads LLC, the privately-held company that operates the U.S. side of the mile-long border crossing, as well as four toll bridges in Alabama, has filed for Chapter 11 bankruptcy protection, citing low traffic as the cause, according to a report from Reuters.

The company is $830 million in debt and is seeking to restructure. Under their plan of reorganization, Syncora Guarantee, Inc. will become the tunnel’s new owner after the bankruptcy. The plan will go to the bankruptcy court in Manhattan on August 28 for approval.

Earlier this month, Windsor Mayor Eddie Francis told the Detroit Free Press that Canada would consider buying the tunnel if sold in bankruptcy:

“As long as the tunnel remains in the public interest, then the City of Windsor has no interest in the tunnel. However, if at that time there is a move to take the Detroit half of the tunnel, if it is put on the auction block or if it is being sold or disposed of in a way that is adverse to the public interest, then the City of Windsor will take steps to do whatever we can do to make sure it remains in the public interest.” 

American Roads' chief executive Neal Belitsky said in court papers that this is not a result of Detroit’s Chapter 9 bankruptcy filing last week, although that did not help. The company is blaming Detroit’s declining population for the reduced traffic.

During the bankruptcy process, tunnel operations will continue as usual.

-Michelle Nelson, Michigan Radio Newsroom

Stateside
5:42 pm
Wed July 24, 2013

What will Detroit look like after the bankruptcy?

Detroit skyline seen from Windsor, Ontario, across the Detroit River.
Bernt Rostad creative commons

Eventually, Detroit’s bankruptcy filing will be over. Eventually, Emergency Manager Kevyn Orr will no longer be in charge of Detroit’s finances.

When those things happen, Detroit will go back to being run by its city government, by a mayor, and a city council.

Daniel Howes, columnist at The Detroit News, focused on this future in his column yesterday in the News. He joined us today to discuss whether Detroit can shed its bad governance habits in light of the bankruptcy.

Listen to the full interview above.

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