Detroit bankruptcy

Sarah Cwiek / Michigan Radio

Bad news keeps on coming for some Detroit retirees hit by the so-called “clawback.”

They must pay back money the city says they were over-paid through excessive interest on annuity savings funds meant to bolster their retirement income.

For many retirees, that adds up to a lot more than the 4.5% direct pension cuts that general system retirees have to absorb.

Provided by Duane Kelley

We want to fill you in on what’s going on with Detroit’s retired firefighters.

These are the men and women who ran into burning buildings, day after day, some of them for decades.

And while they made it through the city’s bankruptcy with their pensions pretty much intact, they lost their health care.

There was a big stop on the Detroit post-bankruptcy "tour" this week.

Former Emergency Manager Kevyn Orr, now-retired federal bankruptcy judge Steven Rhodes, and Chief U.S. District Judge Gerald Rhodes all sat together at Crain's Newsmakers of the Year lunch to share their insights and hopes for the future.

Steve Carmody / Michigan Radio

DETROIT (AP) - The judge who delayed his retirement to oversee Detroit's historic bankruptcy is stepping down next week.

The U.S. Bankruptcy Court asked a federal appeals court on Friday to name another judge to take the case. Detroit emerged from bankruptcy in December but there still will be some issues ahead.

via Detroit Economic Club

Former Detroit emergency manager Kevyn Orr was back in town Tuesday for an “exit interview” before the Detroit Economic Club.

Orr reiterated that municipal bankruptcy was the only real option for Detroit, but insisted both he and the city got through the process relatively unscathed.

“We got really lucky,” Orr said of his team. “We managed to get out of here without selling anything. I managed to get out without being indicated, so that’s sort of a badge of success,” he added, to audience laughter.

A handful of Detroit-based civic-building projects will receive grants totaling $10 million from the Ford Foundation this year.

The New York-based global charity, which has its roots with the Ford Motor Company in Dearborn, has upped its philanthropic role in Detroit since the city’s bankruptcy.

Sarah Cwiek / Michigan Radio

While Detroit has now officially exited bankruptcy, a small but dedicated group of city retirees and employees is still fighting the city’s restructuring plan in court.

Judge Steven Rhodes approved the city’s plan of adjustment in November, and that plan went into effect in December.

However, the Detroit Active and Retired Employees Association is pursuing an appeal that’s set to be heard in federal court later this year. 

Sarah Cwiek / Michigan Radio

Wednesday is a crucial deadline for city of Detroit retirees.

It’s the last day to file applications for help from a state-backed income stabilization fund.

That fund is meant to help pensioners pushed into or near poverty by cuts made during the city’s restructuring in bankruptcy.

user memories_by_mike / Flickr

This week, Jack Lessenberry and Emily Fox discuss some of 2014's top political stories. Funding for road repairs, Detroit's bankruptcy case and gay marriage all made headlines in Michigan this year.


Pension protest in Detroit.
Sarah Cwiek / Michigan Radio

LANSING, Mich. (AP) - Detroit's two pension funds will get $195 million from the state on Feb. 9.

A three-member board overseeing Michigan's contribution to Detroit's bankruptcy case approved the payment Monday. The money is intended to strengthen the pension funds and prevent cuts from going deeper than 4.5 percent for retirees. It also prevents any sale of city-owned art.

Sarah Cwiek / Michigan Radio

Detroit retirees face some big cuts in 2015—and hundreds of them packed two area churches to hear more about it Wednesday.

Detroit’s non-uniform retirees will take 4.5% direct pension cuts as a result of the city’s bankruptcy restructuring plan, which took effect Dec. 10.

Sarah Cwiek / Michigan Radio

In Detroit, city leaders are debating the best way to make sure the city’s neighborhoods see real gains from new development.

One proposal: a city ordinance that would require some big new projects include so-called “community benefits agreements.”

But the idea has some people worried, and has generated pushback in Detroit and beyond.


Ali Lapetina / Michigan Radio Detroit Journalism Cooperative

One thing that strikes us about Detroit – as the city teetered on the brink of insolvency, then entered Chapter 9 bankruptcy protection, and finally, last week, officially emerged from bankruptcy – is that life in the Motor City goes on.

We asked photographer Ali Lapetina to take her camera all over the city in a single day, and shoot pictures from before sunrise until after sunset. What she captured is exactly that: the life that keeps beating in Michigan's oldest and biggest and most complicated city.

Here are some of the people who remain in Detroit after the bankruptcy is over, and will be part of its future.

Detroit skyline.
user JSFauxtaugraphy / Flickr

Today a special edition of Stateside with the Detroit Journalism Cooperative on Detroit after bankruptcy:

  • We examine how the city is trying to get public services back on track with new initiatives for street light replacement and more buses on the road. 
  • Residents discuss the benefits of living in Detroit’s rich cultural environment and weigh these costs with continuing to deal with crime in the area.
  • Many of the issues that led the city of Detroit to bankruptcy are also affecting Detroit schools. We review how Detroit’s education system has adjusted to the decline in funding and enrollment.
  • Detroit’s central business district has gained attention after large acquisitions from private corporations, but many residents worry this growth is bypassing neighborhoods.
  • More companies are also seeing Detroit as an opportunity, establishing themselves in the area and hiring more residents of the city.

Detroiters woke up this morning in a city run by an exuberant, can-do mayor, in a city finally out of bankruptcy and with a spirit of optimism that hasn’t been seen for at least half a century.

Steve Carmody / Michigan Radio

DETROIT (AP) - Detroit's emergency manager says the city no longer will be in a financial emergency when it officially exits bankruptcy.

  That means Kevyn Orr's job will be done once the bankruptcy court approves the exit. He's recommending that he relinquish his position as emergency manager.

Detroit won’t be quite ready to exit bankruptcy until next month, city lawyers told Judge Steven Rhodes at a hearing Monday.

Judge Rhodes has already approved the city’s bankruptcy restructuring plan. But the city must still complete a couple steps before it officially leaves Chapter 9.

It needs to make sure its two-year budget reflects the plan’s terms, and release details of the plan to financial markets.

Detroit skyline.
user JSFauxtaugraphy / Flickr

Detroit's historic and unprecedented bankruptcy came together last Friday for approval from Judge Steven Rhodes.

The Detroit News recently provided in-depth coverage from business columnist Daniel Howes and reporters Chad Livengood and David Shepardson.

We talked to Howes about how the case was completed in 15 months, about the key players, and about what must be done to avoid repeating mistakes.

You can listen to our conversation with Daniel Howes below:  

The group tasked with making sure post-bankruptcy Detroit stays solvent met for the first time Wednesday.

The nine-member Detroit financial review commission will serve as the last word on the city’s financial decisions for at least three years.

The panel will review and approve all city budgets, major contracts and collective bargaining agreements during that “control period.”

Marijuana plant.
USFWS

This Week in Michigan Politics, Emily Fox and Jack Lessenberry discuss whether the legislature will be able to come up with a plan to fix Michigan's roads before the end of the year, a challenge to a Grand Rapids law decriminalizing marijuana, and what’s next on Detroit’s road to recovery.


Detroit's riverfront.
Ian Freimuth / Flickr

Matt Helms at the Detroit Free Press reports that Mayor Mike Duggan has some sticker shock over the cost of Detroit’s bankruptcy.

Helms reports that Duggan “is alarmed” that the city will have to pay lawyers and consultants close to $200 million. Duggan worries the payout could put the city at risk of not meeting the terms of the city’s plan of adjustment – a plan the federal bankruptcy judge approved last week.

More from Helms and the Detroit Free Press:

Three people familiar with Duggan's views on the fees told the Free Press that the mayor believes the total fees could climb close to $200 million, an amount he worries could jeopardize the city's ability to meet the bankruptcy's financial terms. That compares to the roughly $100 million that many bankruptcy experts predicted would be the cost when Detroit filed for the nation's largest-ever municipal bankruptcy in July 2013.

A spokesperson for former emergency manager Kevyn Orr disputes that the bill could reach $200 million, saying the fees charged to the city reached $144.3 million as of October 31.

Sarah Cwiek / Michigan Radio

Having secured court approval for its bankruptcy restructuring last week, Detroit is now ready to emerge from bankruptcy.

But some Detroit residents and activists say that plan sacrificed both democracy and the public interest.

The group Detroiters Resisting Emergency Management says the bankruptcy process was about imposing financial solutions on social and political problems.

And they believe the newly-approved “plan of adjustment” won’t benefit the vast majority of Detroiters.

Whenever surveys are taken as to which professions are the most trusted and admired, journalists are pretty near the bottom. We used to beat out used car salesmen, but I think that thanks to regulation, they are in better standing these days.

Today, journalists and lawyers usually take turns at being the least admired. I don’t propose to talk about why lawyers are so unpopular; after all, I don’t want to be sued. But I do know why reporters are held in such low repute.

Part of it is our own fault.

As in, when a TV reporter sticks a microphone in the face of somebody whose child has been murdered and asks, “how do you feel?”

But even when we do our jobs well, we make people dread us. We tell you that the system doesn’t work, and the politicians are corrupt, and the water is tainted, and the priest is embezzling from the parish - things like that.

That’s what we are supposed to do.

We seldom show up just to tell you good news. Maybe the best thing we can say about our society is that decent behavior still isn’t news.

Except - in some contexts.

user Tyrone Warner / Flickr

This Week in Review, Jack Lessenberry and Rina Miller discuss Michigan’s anti-gay marriage law being upheld, the Detroit bankruptcy trial ruling, and what to expect during this term’s lame-duck session.


Detroit will exit bankruptcy.
Ian Freimuth / Flickr

Federal bankruptcy Judge Steven Rhodes has approved Detroit's plan to exit bankruptcy. Rhodes' ruling comes after several major creditors reached deals with the city in recent weeks.

The ruling clears the way for the city to shed around $7 billion in debt.

More from the Detroit News:

Part of the Diego Rivera mural in the DIA. Foundations pulled together to help save the art in the museum.
Joseph Gallegos / Flickr

It’s hard not be awed by the scale and detail in Diego Rivera’s Depression-era “Detroit industry” murals at the Detroit Institute of Arts, but these scenes depicting both the splendor and hardship of an industrial powerhouse were potentially at risk in the city’s bankruptcy.

That’s because right now, Detroit owns the museum and its world-class collection.

And that made Detroit’s creditors—collectively owed billions of dollars—ask: Why shouldn’t the city have to sell at least some of it to pay them?

Darren Walker, President of the Ford Foundation, says the idea was offensive.

“The idea that the art could actually be auctioned off was so … antithetical to our idea of democracy and the role of cultural organizations.”

But that fear actually turned out to be an important lever in the bankruptcy case.

Today on Stateside:

  • Detroit News business columnist Daniel Howes brings us up to date on the Detroit bankruptcy case and gives us a look ahead at what comes next.
  • Dave Brandon is now the former Athletic Director at the University of Michigan and the search has already begun for his replacement. Michigan Radio’s sports commentator John U. Bacon tells us who may be on the shortlist for the job.
  • The “Little Free Libraries” movement is taking root in Detroit.
  • James McCommons, wildlife photographer and professor at Northern Michigan University, talks to us his path to becoming one of America's leading conservationalists.
  • Our It's Just Politics team updates us on their 5 things to watch on election day. 
  • We talk about how money was spent in this election with Rich Robinson, director of the Michigan Campaign Finance Network. 

*Listen to the full show above

Detroit’s bankruptcy trial wrapped up Monday with closing arguments.

At issue: whether the city’s plan of adjustment to restructure its debt is “fair and equitable” to its various creditors, as required by Chapter 9 of the municipal bankruptcy code.

Judge Steven Rhodes must also decide if the plan is “feasible”—whether Detroit can balance its books and avoid slipping back into bankruptcy.

City of Detroit

Detroit emergency manager Kevyn Orr took the stand again Tuesday in the 22nd day of the city’s bankruptcy trial.

Orr testified mostly about Detroit’s recent settlement with bond insurer Financial Guaranty Insurance Corporation. That deal is outlined in a draft of the ninth version of Detroit’s plan of adjustment (the city’s proposal to “adjust” its debts in bankruptcy court).

Detroit bankruptcy judge Steven Rhodes.
John Meiu / Detroit Legal News Publishing LLC

During a brief hearing this morning in U.S. bankruptcy court, Judge Steven Rhodes declared his intention to make a final ruling on Detroit's plan to get out of bankruptcy.

Rhodes said he'll make his decision during the first week of November.

His announcement comes after the city announced that it had reached a deal with one of its last remaining major creditors. The Financial Guaranty Insurance Company will no longer oppose Detroit's plan to exit bankruptcy under the terms of a deal reached at 2:30 in the morning last week.

FGIC, which stood to lose $1.1 billion, agreed to terms that gives the company the right to develop the area where the Joe Louis Arena and parking garage now stand. The deal also gave them millions of dollars in credits for future purchases and city notes.

Rod Meloni of WDIV-TV was in court this morning live-blogging. He wrote about what we can expect next for the days remaining in Detroit's bankruptcy trial:

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