bankruptcy

Politics & Culture
5:50 pm
Mon July 22, 2013

Stateside for Monday, July 22nd, 2013

On this Monday, July 22, four days after Detroit made history by filing for Chapter 9 bankruptcy, we spent the first half of the show breaking things down and figuring out where things stand in the nation's largest municipal bankruptcy ever.

And, we looked at what needs to be done to preserve and protect Michigan's rivers and lakes.

But, back to Detroit and what we know right now. A judge in Lansing will take a week to sort through arguments on whether the state Constitution protects Detroit’s pension funds from losses if the city goes bankrupt.

Ingham County Circuit Judge Rosemary Aquilina says she will decide next Monday whether Detroit's bankruptcy filing violates the state Constitution, and its protections for pension benefits.

Assuming the Chapter 9 bankruptcy goes forward, Detroit will have to figure out how to reduce billions of dollars of debt. Creditors, of course, will push for the most money they can get, which means they're eyeing some of the city's most valuable and treasured assets.

Stateside
5:38 pm
Mon July 22, 2013

Why do so many people love to hate Detroit?

Peter Martorano Flickr

An interview with Michigan Radio’s political analyst Jack Lessenberry and Todd Spangler from the Detroit Free Press Washington bureau.

In the days before and after Detroit filed for bankruptcy, you didn’t have to look too far to read and hear comments about Detroit that range from dumb to mean-spirited to outright vicious.

One has to wonder: Just why did actor Jon Hamm of AMC’s Mad Men have to take a shot at the city of Detroit while hosting the ESPY awards last week, talking about San Francisco beating Detroit in the World Series?

Why did a co-worker flying back to Detroit from an out-of-town visit hear the guys in the row behind her discussing the Detroit bankruptcy to be summed up by one man declaring, “I wish we could just dump Detroit into the lake. We’d all be so much better off.”

A Detroit Free Press reader commented “Way To Go Mo Town!!! We Knew You Could Do It!!! Now, Everybody Gets Nothing!!!”

And the Twittersphere has been mighty busy mocking the Motor City. Just check out #newdetroitcitymottos.

We wanted to go deeper into these attitudes. Would things like this be said, say, if it was Chicago or Atlanta having to file for bankruptcy? How far back does this scorn for Detroit reach? How much of this attitude permeates the halls of Congress?

We were joined today by Michigan Radio’s political analyst Jack Lessenberry and Todd Spangler from the Detroit Free Press Washington bureau.

Listen to the full interview above.

Stateside
5:33 pm
Mon July 22, 2013

Navigating the 'uncharted territory' of Detroit's bankruptcy

Eric Scorsone, MSU Extension specialist and economist.
Michigan State University

An interview with Eric Scorsone, economist with Michigan State University.

No matter who is commenting or offering expert opinion on the Detroit bankruptcy, everyone seems to agree on the fact that this is "uncharted territory." And that's about all they can agree on.

Take the speed of the bankruptcy: you can find experts who predict a slow, tortuous process. And just as easily, you'll find predictions that Kevyn Orr will move this bankruptcy faster than anyone expects.

And, did Kevyn Orr and Governor Snyder have any other options to help Detroit back to financial stability?

And what does this all mean for other cities in Michigan and the state's economy?

So many questions, so many opinions. That's why we were very glad to welcome into the studio Eric Scorsone, economist with Michigan State University and an expert on the ins and outs of government finances.

Listen to the full interview above.

Economy
4:35 pm
Mon July 22, 2013

Detroit's assets are under review amid crushing debt

Art in the DIA is the topic of many discussions about Detroit's future.
Photo courtesy of the DIA

Kevyn Orr is Detroit’s state-appointed emergency manager. And he has some pretty extraordinary powers to chart the course of Detroit’s potential bankruptcy—and its future.

Last Friday, Orr took questions from reporters. The very first question he faced was pretty much, ”What’s for sale?”

“Right now there’s nothing for sale, including Howdy Doody.”

Orr was actually referring to the Detroit Institute of Arts, whose collection includes the original puppet from the 1950s children’s TV show. Though no one knows for sure, the DIA’s total assets — which include masterpieces by Van Gogh and Picasso — could be worth about $2.5 billion.

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Law
2:06 pm
Mon July 22, 2013

Detroit bankruptcy decision to wait a week

Judge Rosemarie E. Aquilina
Ingham County

Ingham County Circuit Judge Rosemarie Aquilina says she will decide next Monday whether the bankruptcy filing violates the Michigan Constitution, and its protections for pension benefits. 

Ronald King is an attorney for city pension funds. He says the bankruptcy can still go forward. But he says the state should not proceed on anything that might threaten pension benefits.

"Maybe the courts will disagree with us, but there is a constitutional protection in place that guarantees or protects accrued pension benefits, and we have an obligation to at least play that out."

That could be a problem when it comes to dealing with Detroit's heavy debt burden. Pension funds are among the city's largest creditors. The state says the case belongs in federal court. 

Politics & Government
6:45 am
Mon July 22, 2013

In this morning's news: Detroit bankruptcy, Flint school district deficit, St. Petersburg, Russia

Morning News Roundup for Monday, July 22, 2013
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Detroit bankruptcy is topic of national conversation

Snyder, Detroit's emergency manager Kevyn Orr and Detroit Mayor Dave Bing appeared on Sunday morning talk shows yesterday to talk about filing bankruptcy for Detroit. Snyder said he will push to protect the retired city workers whose pensions are on the table. He said the bankruptcy filing included protections for retirees and urged them to remain calm. Orr said on "Fox News Sunday" that there are going to have to be "concessions." Bing on ABC's "This Week" said now that bankruptcy has been filed, leaders have to take a step back before making a decision on a federal bailout.

Flint school district faces more budget cuts

The Flint School Board will take up a Deficit Elimination Plan tomorrow night. The district is wrestling with a nearly 16 million dollar deficit. The Flint school district has made deep budget cuts but more cuts are likely if the district follows the plan to eliminate its deficit by June 2016. The Flint School Board has until July 31st to send its deficit elimination plan to the state.  

Lansing may end its relationship with St. Petersburg, Russia

The Lansing city council will be meeting tonight to discuss its sister city relationship with St. Petersburg, Russia. St. Petersburg recently passed an anti-gay ordinance and police there arrested people at an LGBT rally. Members say they want to send a message to St. Petersburg officials by canceling Lansing’s two decade sister cities relationship with the city.

Economy
7:06 pm
Fri July 19, 2013

7 questions and answers about Detroit's bankruptcy

Credit Patrick Gibson / Flickr

Detroit filed for Chapter 9 federal bankruptcy protection yesterday.

The federal courts have never seen a municipal bankruptcy filing of this size, so there are a lot of questions out there.

Earlier today, we asked our Facebook followers, "What questions do you have about Detroit's bankruptcy?" 

We've been working hard to answer as many of them as possible. Here's what we have so far, but keep checking back as we gather more information for you.

1. Why now?

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Politics & Government
4:02 pm
Fri July 19, 2013

What does bankruptcy mean for Detroiters?

70,000 vacant homes in Detroit are one of many aspects of the city that remain in limbo while the bankruptcy case goes through the courts.
Credit JasonParis / Flickr

Detroit's bankruptcy filing has raised a lot of questions, especially for people who live in the city. It's unlikely the day-to-day lives of Detroiters will change very much under a bankruptcy.

Lyke Thompson is the director of Wayne State University's Center for Urban Studies. He says Detroit's city services are already pretty bad, and that there will be few immediate differences for city residents, but things could get worse before they improve.

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Politics & Government
2:22 pm
Fri July 19, 2013

Lessons for Detroit: Municipalities that also declared bankruptcy

Peter Martorano Flickr

What will bankruptcy mean for Detroit?

There are certainly a lot of unknowns as the city navigates through the largest municipal bankruptcy filing in U.S. history, but we can look to other municipalities that have gone through this process.

Here’s a brief outline of two other major municipal bankruptcy cases in the U.S.:

1) Jefferson County, Alabama

 

Population: 658,931

Filed for Bankruptcy: 2011

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Politics & Government
6:56 am
Thu July 11, 2013

In this morning's news: Gay marriage lawsuit, Detroit pensions, union dues in schools

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Hearing date set for challenge to gay marriage ban

"A federal judge has set an October 1 hearing date for a challenge to Michigan’s ban on gay marriage and adoptions by same-sex couples. A lesbian couple in Hazel Park is seeking the right to marry or jointly adopt the children they are raising together. Michigan Attorney General Bill Schuette says the U.S. Supreme Court has allowed states to continue setting their own rules on marriage, and he is defending the Michigan Constitution," Rick Pluta reports.

Kevyn Orr and union leaders discuss pension benefits

"A group of Detroit pension and union leaders have met in the first of two closed-door meetings with the restructuring team of the city's state-appointed emergency manager. Kevyn Orr wants huge cuts in pension benefits and health insurance to avoid the largest municipal bankruptcy in U.S. history. Some bankruptcy experts say the session could be the tipping point that leads to an unprecedented bankruptcy," the Associated Press reports.

Reinstated law prohibits schools from taking union dues

A Michigan law prohibiting schools from taking payroll deductions for union dues is back on the books. A federal judge erased an injunction on the law after an appeals court struck down her 2012 decision suspending it. The law was approved by the Republican-controlled legislature and signed by Governor Rick Snyder. The appeals court said ending payroll deductions doesn't infringe on a union's right to free speech.

Stateside
5:03 pm
Wed July 10, 2013

Detroit's creditors will not be going on a bus tour of the city

No DDOT bus tour for creditors.

An interview with Nancy Kaffer, Columnist at the Detroit Free Press.

Detroit’s emergency manager has canceled a planned bus tour for city bondholders today.

The bus tour was meant to hammer home that Detroit is in dire shape and simply cannot afford to pay off all its debts.

The Wall Street creditors are in town to talk with Kevyn Orr. They’re trying to work out a deal outside bankruptcy court.

Nancy Kaffer, Columnist at the Detroit Free Press joined us today.

Listen to the full interview above.

Opinion
8:49 am
Tue July 9, 2013

It’s time to plan for what comes after bankruptcy in Detroit

Lessenberry commentary for 7/9/2013

During the last year of World War II, as millions died in history’s most sustained orgy of violence, other men quietly and secretly planned what to do after the war was over. They worked out the details of the division of Germany and the administration of Japan even before those countries had been occupied. Doing that in advance was essential.

Historians agree that was a precondition for Europe’s eventual recovery, and Japan’s rebirth as a prosperous democracy.  This advance planning also went a long way to prevent a new world war breaking out in the rubble of the old.

I mention this because I hope somebody is thinking about what to do when Detroit declares bankruptcy, and even more importantly, when that process is over. Planning how the city will begin the process back to some form of prosperity.

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Politics & Government
7:16 am
Tue July 2, 2013

In this morning's news: Challenge to gay marriage ban, changing public defense, bankruptcy in Flint

Morning News Roundup for Tuesday, July 2, 2013
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Federal judge will hear challenge to gay marriage ban

A federal judge is allowing a legal challenge to Michigan adoption laws and its ban on same-sex marriage to move forward. Judge Bernard Friedman says the decision to strike down DOMA last week left unanswered questions that could be addressed by this case. April DeBoer and Jayne Rowse are raising three children together; they say Michigan law violates the equal protection rights of their children. The judge called a July 10th hearing to chart the next steps in the case.

Legislation to improve legal defense for indigent Michiganders

Governor Rick Snyder signed legislation yesterday that will make changes to the state’s public defense system. The bill will create a commission to set statewide standards to ensure effective legal representation for poor defendants. The commission will also monitor counties to make sure each one is meeting those standards.

Flint EM warns possibility of bankruptcy

Flint's Emergency Manager, Ed Kurtz, warns the city could run out of money if it's forced to pay retirees full health benefits. A federal judge recently ruled Flint has to give retired workers the benefits they were promised. Kurtz says the decision hurts retirees more than it helps and that bankruptcy would mean much bigger cuts for retirees and current workers.

Stateside
5:39 pm
Thu June 20, 2013

Detroit's possible bankruptcy may hit city retirees the hardest

Peter Martorano Flickr

An interview with Daniel Howes.

It's Thursday, which means it’s time for our weekly check-in with Detroit News Business Columnist Daniel Howes.

As the story of Detroit's possible---and many say likely---bankruptcy continues to unfold, we keep hearing that many people are going to feel financial hardship.  And when you look at all the possible parties who will be feeling the pain, it seems that some of the most vulnerable are city retirees.

Daniel Howes joined us in the studio today to discuss what bankruptcy will mean for Detroit residents.

Listen to the full interview above.

Politics & Culture
4:58 pm
Thu June 20, 2013

Stateside for Thursday, June 20th, 2013

It'll be 50 years ago in August when Martin Luther King Jr. gave his now iconic "I have a Dream Speech." But King gave an earlier version of that speech on June 23rd, 1963 in Detroit. We took a look back to the events during that address that some Detroiters say was just as important as the March on Washington.

And, as the first day of summer rears its head, Michigan Radio's sports commentator joined us to remember summers past.

And, we spoke with a Michigan poet who has built his own version of Stonehenge just north of Traverse City.

Also, author and shipwreck explorer Valerie Van Heest joined us to discuss the mystery behind a plane crash that occurred over the Great Lakes 63 years ago.

First on the show, it's Thursday. Time for our weekly check-in with Detroit News Business Columnist Daniel Howes.

As the story of Detroit's possible---and many say likely---bankruptcy continues to unfold, we keep hearing that many people are going to feel financial hardship.  And when you look at all the possible parties who will be feeling the pain, it seems that some of the most vulnerable are city retirees.

Daniel Howes joined us in the studio today to discuss what bankruptcy will mean for Detroit residents.

Politics & Government
8:49 am
Wed June 19, 2013

Commentary: Are Pensions Sacred?

Lessenberry commentary for 6/19/2013

We didn’t have an early spring this year, but it looks like an early summer. I say that because while it is still technically spring, the authorities are already engaged in what has been a late summer Michigan ritual, digging up a field to look for Jimmy Hoffa.

Usually, it strikes me as strange that this case still gets so much attention, but this year we’ve been so overwhelmed with news from Detroit that we probably need a little escape.

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Politics & Government
8:43 am
Mon June 17, 2013

Commentary: After the Fall

Lessenberry commentary for 6/17/2013

It’s hard to be shocked by anything relating to Detroit’s financial crisis. But frankly, I was, when I read the details of the report Emergency Manager Kevyn Orr gave to the city’s creditors.

For months, we’d been hearing that the city had as much as $14 billion in long-term debt. The real figure is more like twenty billion. No other city in the country pays even twenty percent of its revenue for what they call legacy costs -- debt service and pensions. Detroit pays more than forty percent.

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Law
4:06 pm
Fri June 14, 2013

Michigan AG says state law protects DIA assets from bankruptcy sale

The Detroit Institute of Arts
Maia C/Flickr

Michigan Attorney General Bill Schuette has released a legal opinion that says the collection held by the Detroit Institute of Arts cannot be sold if the city goes into bankruptcy.

The opinion was issued in response to a request by Senate Majority Leader Randy Richardville.

The opinion says the assets owned by the Detroit Institute of Art are held in a public trust for the people of Michigan, and cannot be used to pay off the city's debts. Schuette says in the opinion, "In Michigan, we not only appreciate our cultural treasures, we guard them zealously."

Detroit has $15.6 billion dollars in long-term liabilities, and emergency manager Kevyn Orr will need to take some drastic measures to pay those debts.

Kevyn Orr -- who is a bankruptcy attorney and turnaround expert -- is in the middle of negotiating a debt reduction plan with the city's creditors. He has said there are no guarantees the DIA's assets would be off the table in the event of a bankruptcy.

Politics & Government
7:53 am
Wed June 5, 2013

In this morning's news: Budget passed in Legislature, bill to protect DIA, gas prices in Michigan

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Budget awaits Governor Snyder's signature

State lawmakers passed a budget that would increase funding to local governments and schools.

"Senate Majority Leader Randy Richardville calls it the best budget he’s ever helped pass.  But the budget does not include Snyder’s request to expand Medicaid or increase road funding by more than a billion dollars," Michigan Radio's Jake Neher reports.

Senate voting to protect DIA

The Michigan Senate is expected to vote today on a measure to protect the Detroit Institute of Arts. Detroit's emergency manager Kevyn Orr has warned the Institute's assets could be at risk if the city goes bankrupt. If this bill passes, the same protections would apply to collections in other museums across Michigan.

Michigan gas prices amongst highest in nation

Gasoline prices in Michigan are the second highest in the United States right now. It could be several weeks before there's any relief at the pump.

"Analyst Patrick deHaan of GasBuddy dot com says there are fewer gasoline refineries in the Midwest than other parts of the country, and gasoline commodity traders are also driving up the prices," Michigan Radio's Tracy Samilton reports.

Economy
5:23 pm
Wed December 5, 2012

Stateside: What would a Detroit bankruptcy bring?

A Chapter 9 Bankruptcy could present possible restructuring options for Detroit
John F. Martin Creative Commons

As the prospect of a Chapter 9 Bankruptcy looms over Detroit, many are wondering what will become of the city.

We spoke with Forbes.com contributor Micki Maynard and the Detroit News' Daniel Howes about restructuring the city and those who run it.

“It would be very difficult for the image of the city. It would be the largest municipal bankruptcy in the history of the country. It would probably last three years and be very unforgiving to the employees and residents,” said Howes.

Howes insisted that taxpayers would mostly likely have to fund the restructuring of the city.

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