Detroit bankruptcy

Detroit’s bankruptcy case is throwing a wrench in the city’s usual budget process.

Detroit Mayor Mike Duggan didn’t give his charter-mandated city budget address as scheduled Monday.

Rather, officials told City Council members that Detroit needs to update its plan of adjustment first. That’s the city’s restructuring blueprint for getting through bankruptcy.

Detroit chief financial officer John Hill said that since the plan will shape the city budget, it doesn’t make sense start talking now.

Photo by penywise / morgueFile

This Week in Review, Rina Miller and Jack Lessenberry discuss the latest with the Detroit bankruptcy, the continuing controversies over the General Motors recall, and the money problems involving the charter school system running Muskegon Heights schools.


Judge Steven Rhodes approved a key settlement in Detroit’s historic bankruptcy case Friday.

The deal will settle a costly interest-rate swaps agreement with two banks, UBS and Bank of America, for $85 million.

Emergency manager Kevyn Orr has pushed hard for such a deal. Detroit had guaranteed the swaps with casino revenue, and paid out about $200 million since 2009.

Paul Hitzelberger / United Photo Works

It’s Thursday, the day we talk Michigan politics with Ken Sikkema, former Senate Majority Leader and senior policy fellow at Public Sector Consultants, and Susan Demas, publisher of Inside Michigan Politics.

This week, host Jennifer White discusses the latest developments in the Detroit bankruptcy case and examines the implications.

There was a significant breakthrough yesterday. A settlement was announced between the city of Detroit and three major bond insurers. The insurers will get about 74 cents on the dollar, a significant increase from what emergency manager Kevyn Orr originally offered, and the roughly $50 million in savings will go to support retirees.

The question now is whether retirees will accept further cuts to their pensions, given the fact that Gov. Rick Snyder has stated that the state will not put any money forward unless the retirees agree to cuts. Ken Sikkema says it's imperative that retirees back the plan.

Detroit skyline.
user JSFauxtaugraphy / Flickr

There have been two big developments this week in the high-stakes showdown over Detroit's pensioners, its art treasures and creditors who hope bankruptcy judge Steven Rhodes will pressure the city to put those art treasures on the table.

There's a lot to try to sort out. So, as we do each Thursday, we spoke to Detroit News business columnist Daniel Howes.

Listen to the full interview above.

The average gas mileage of new vehicles sold in the U.S. has steadily been improving, and greenhouse gas emissions are at an all-time low. The Environmental Protection Agency also recently set new emissions standards, scheduled to be phased in between 2017 and 2025, that will reduce the amount of sulfur found in gasoline.

But is the slow and steady climb in fuel economy and emissions enough? On today’s show, we ask if the Obama administration's 2016 and 2025 fuel efficiency goals setting the bar too low?

Then, a new documentary film brings us the story of the Great Lakes as seen through its ice.

And, last month, Gov. Snyder confirmed a financial emergency existed in Royal Oak Township. Can other communities learn from Royal Oak’s situation?

Also, the Share Art Project is a collaborative effort among artists at the Buckham Gallery, students and the Genesee Valley Regional Center. We spoke to a Buckham board member about the program and an upcoming exhibit.

First on the show, there have been two big developments this week in the high-stakes showdown over Detroit's pensioners, its art treasures and creditors, who hope bankruptcy judge Steven Rhodes will pressure the city to put those art treasures on the table.

There's a lot to try to sort out. So, as we do each Thursday, we spoke to Detroit News business columnist Daniel Howes.

If you heard my commentary yesterday on the latest in the Detroit bankruptcy battles, I began with the news that the city had reached a deal with the holders of its general obligation bonds.

All we knew then was that an agreement had been reached, and I said the bondholders were, to quote myself, “evidently going to settle for less than 20 cents on every dollar owed them.”

Well, I was astonishingly far off.

In fact, they ended up settling for 74 cents for every dollar. But there is a reason why I was so wrong.

Could tobacco settlement money help the DIA?
DIA

One group who stands to lose a lot in Detroit’s bankruptcy has upped the ante in the battle over the Detroit Institute of Arts.

The Financial Guaranty Insurance Corporation, a major bond insurer, has gone out and solicited bids for the museum’s assets.

And in papers filed in federal bankruptcy court Wednesday, FGIC said it’s received four tentative bids for the museum’s assets, or portions of them.

The bidders include:

If you aren’t following every twist and turn in the saga of Detroit’s bankruptcy, you may think things are well on track.

Today, in fact, came the good news that the city has apparently reached a deal with its unsecured bondholders, who are evidently going to settle for almost 75 cents of every dollar owed them. 

But the biggest and toughest challenges are ahead.

And if you think the Detroit Institute of Arts is now safe, think again.

Here is how things stand:

Sarah Cwiek / Michigan Radio

Mediators in Detroit’s bankruptcy case have made a potentially huge breakthrough with some of the city’s bondholders.

Bondholders are one of the city’s biggest groups of unsecured creditors.

That means they’re also one of the most important groups for emergency manager Kevyn Orr to get on board with his plan of adjustment, and avoid a protracted legal battle that could bog the city down in bankruptcy court for months or years.

Now, negotiators for the city and three major bond insurers have announced a settlement deal.

NOAA

This Week in Michigan Politics, Emily Fox and Jack Lessenberry discuss the state of education in Michigan, an update on the Detroit bankruptcy and the race to fill four seats from Michigan's congressional delegation.

A former Republican state representative says he was on the "wrong side of history" when he opposed same-sex marriage during his time in Lansing 10 years ago. On today's show, Chris Ward, former representative from Genoa County talked about the gay marriage ban and the future of the Republican Party.

Then, we spoke with a very talented Flint rapper about his music and raising the profile of the Flint community.

We heard from writer Deidre Stevens about the Ca-Choo Club, a very unique way to attract allergy sufferers to Sault Ste. Marie.

Also, as Michigan's Aug. 5 primary and November election draw closer, there are some very tight races shaping up. Who are the voters who could most influence the outcome of these races, depending upon whether they stay home or go to the polls?

First on the show, yesterday was the deadline to file objections to the disclosure statement spelling out Detroit's plan to climb out of its bankruptcy hole.

And yes, objections poured in – long lists of objections to the disclosure statement.

Detroit News reporter Chad Livengood joined us today to tell us who's objecting, why, and what comes next.

Paul Hitzelberger / United Photo Works

Yesterday was the deadline to file objections to the disclosure statement spelling out Detroit's plan to climb out of its bankruptcy hole.

And yes, objections poured in – long lists of objections to the disclosure statement.

Detroit News reporter Chad Livengood joined us today to tell us who's objecting, why, and what comes next.

Listen to the full interview above.

Paul Hitzelberger / United Photo Works

Judge Steven Rhodes will make a major ruling in Detroit’s ongoing bankruptcy case this week.

Rhodes will decide whether the city can settle an interest-rate swaps deal with two major banks for $85 million.

Detroit had hoped to hedge against interest rates rising when it entered into the swaps deal on some city pension debt in 2006.

But interest rates fell to nearly 0, and Detroit has been forced to shell out about $200 million to UBS and Bank of America since 2009.

NOAA

This Week in Michigan Politics, Jack Lessenberry and Christina Shockley discuss the impact of a fourth member of the state's congressional delegation who won't seek re-election, Medicaid expansion, President Obama's trip to Michigan to talk about the minimum wage, and Detroit's latest plan for bankruptcy.

Sarah Cwiek / Michigan Radio

Detroit pensioners are trying to turn up the heat on emergency manager Kevyn Orr Tuesday – just as he’s doing the same thing to them.

Protesters filled the street in front of Detroit’s federal courthouse on Tuesday to slam Orr’s proposed cuts to city pensions.

Orr filed a revised version of his bankruptcy restructuring plan there Monday. An earlier version, known formally as a plan of adjustment, was filed in February.

DIA/Flickr

Even before Detroit officially filed for bankruptcy last July, many Michiganders and outsiders feared for the future of the Detroit Institute of Arts – the city’s so-called "crown jewel."

With the city in financial turmoil, the newly appointed emergency manager of Detroit started a catalog of city assets. Many feared the DIA's status as a city asset would mean part of the museum’s collection could be sold off to satisfy creditors.

Lester Graham / Michigan Radio

On the one-year anniversary of his appointment, Detroit’s emergency manager spoke about the latest developments in the city's bankruptcy in a speech at the University of Michigan.

One thing in the works is getting a $120 million loan from Barclays of London. A state board approved the loan today. The Detroit City Council also approved the deal, despite concerns that the money might be used to pay big-money bankruptcy consultants. But, emergency manager Kevyn Orr says, ‘not so.’

wikimedia commons

Detroit emergency manager Kevyn Orr is looking at potential private operators for the city’s water system.

Orr says the city has been forced to consider leasing the water system to a private operator because talks to create a regional authority with suburban customers broke down.

Steve Carmody / Michigan Radio

There is almost a billion dollars worth of state surplus. Should the state spend it or give it back to taxpayers? Should we get a rebate, or should that money be put towards fixing roads and helping schools? And what about the Detroit bankruptcy? 

Also, March Madness is upon us. President Obama chose Michigan State to win the NCAA basketball championship. But who did Governor Snyder pick?

Rick Pluta, Captiol Bureau Chief for the Michigan Public Radio Network and co-host of It's Just Politics, joined us today.

Listen to the full interview above.

user aMichiganMom / Flickr

Ninety-five years ago, the Detroit Institute of Arts was in deep, deep financial trouble.

It kept the doors open by turning over the building and its art to the thriving city of Detroit in exchange for annual funding.

And now it stands, poised to flip that arrangement upside down, hoping to cut Detroit's ownership of the DIA in order to protect its treasures from hungry creditors.

There's quite a long and complicated history between the DIA and the city.

And yet, despite nearly a century tied together, the reaction of Detroiters to the proposed spin-off of the DIA is pretty muted – certainly much different than the reaction when the state took over operations of Belle Isle.

Detroit Free Press writer Mark Stryker explored this in his piece for last Sunday's paper.

Listen to the full interview above.

 

The judge overseeing Detroit’s bankruptcy case has pushed a scheduled trial on the city’s reorganization plan back by at least a month.

Judge Steven Rhodes had set a mid-June date trial date on the city’s proposed plan of adjustment. That plan is emergency manager Kevyn Orr’s basic road map for getting the city out of bankruptcy, and a key document in any municipal bankruptcy.

City lawyers had asked for the extension, reportedly to them more time to solicit votes for the plan.

Ron Reiring / Flickr

When Hurricane Katrina slammed into New Orleans on August 29, 2005, we here in Michigan – along with the rest of America – watched in horror and shock. The scenes from New Orleans were practically beyond comprehension.

It's been eight and a half years since Katrina. New Orleans is still rebuilding and still recovering.

And, in the process, lessons have been learned that might benefit Detroit as it struggles back from bankruptcy and years of shrinking resources and population.

Writer Campbell Robertson's recent piece in the New York Times, A Lesson for Detroit in Efforts to Aid a New Orleans Devastated By Katrina, gives Detroiters and decision-makers much food for thought.

Robertson joined us today.

*Listen to the audio above.

  As Detroit continues to move through the bankruptcy process, an outstanding issue is a plan to protect artwork at the Detroit Institute of Arts. A group of foundations and private donors have pledged over $300 million that would help cover city pensions and offset the need to sell the artwork. 

A recent op-ed in the Chronicle of Philanthropy questions the wisdom of this plan. William Schambra is the director of the Hudson Institute’s Bradley Center for Philanthropy and Civic Renewal in Washington D.C. and he joined us today.


People who oppose Detroit’s plan to reorganize in bankruptcy have until the start of next month to file objections.

One group of about 20 residents, retirees and activists picked up the paperwork to do just that at federal offices in downtown Detroit Monday.

Reverend Charles Williams II and representatives from the National Action Network led the group of people looking to file individual objections to the city’s plan of adjustment.

Peter Martorano / Flickr

As Mayor Duggan does the heavy lifting to get Detroit actually up on its physical "feet," the other part of its rehab is, of course, the historic bankruptcy.

So many pieces, so many players.

Detroit News Business Columnist Daniel Howes has been keeping a close eye on all of it, and he joined us today for our weekly check-in.

Listen to the full interview above.

You’ve heard it before, folks, time and time again. In today's economy, the more education one attains after high school, the better, right? But what if some students might be better served in other settings, academic or otherwise? Is it time for Michigan to develop some credible alternatives for high school grads? We’ll find out more on today’s show.

Then, we spoke to Daniel Howes about his reporting on Detroit's historic bankruptcy. 

And, Fifth Third Ballpark wants to expand its concessions menu. We took a look at some of the food options fans can vote for, including deep-fried lasagna and a bacon-and-chocolate taco.

Also, how can we keep young entrepreneurs fresh out of college in Michigan? The Michigan Collegiate Innovation Prize awards them for launching their start-ups in state.

And, a new fee system for hunting and fishing goes into effect soon, and it’s the first significant raise in over 15 years. We spoke with Ed Golder of the Michigan Department of Natural Resources about what’s behind this increase.

First on the show, Detroit Mayor Michael Duggan delivered his first State of the City speech last night before a packed, invitation-only crowd. And his message was clear: We are going to change what it means to live in Detroit.

Even among those who have a "wait-and-see" attitude, the mayor's speech is being praised for what many believe is a refreshing attention to detail and the sense that a team is at work.

Detroit Free Press columnist Nancy Kaffer joined us today.

Lester Graham / Michigan Radio

It's been five days since emergency manager Kevyn Orr released the bankruptcy reorganization blueprint, which maps out a way to wipe out billions in debt, spend over half a billion in tearing down abandoned buildings and invest one billion to improve city services.

Now that all stakeholders have had a chance to digest the blueprint, the battle lines are being drawn.

Detroit Free Press columnist Rochelle Riley joined us today to give us a look ahead.

Listen to the full interview above.

We've almost all done it – you might have even done it just today: Made a purchase online.

But have you ever wondered why you have to pay sales tax on online purchases from some retailers like Target, but not others, like Amazon? There's new legislation in Lansing that might change that. We found out more on today's show.

Then, close your eyes. Now, picture a farmer. What comes to mind? You probably pictured a man, but more women are raising crops now in Michigan. We took a look at what's behind the rise in female farmers.

And, it was the most infamous event of one of the most painful and divisive times in Michigan's history. A new play at the Charles H. Wright Museum of African American History explores the Algiers incident which occurred during the Detroit riots. 

First on the show, it's been five days since emergency manager Kevyn Orr released the bankruptcy reorganization blueprint, which maps out a way to wipe out billions in debt, spend over half a billion in tearing down abandoned buildings and invest $1 billion to improve city services.

Now that all stakeholders have had a chance to digest the blueprint, the battle lines are being drawn.

Detroit Free Press columnist Rochelle Riley joined us today to give us a look ahead.

Department of History / University of Pennsylvania

Tom Sugrue wrote the book "The Origins of the Urban Crisis: Race and Inequality in Postwar Detroit."

Sugrue is a Detroit native and a professor of history and sociology at the University of Pennsylvania. He will be one of the keynote speakers at this Thursday's Detroit Policy Conference.

Detroit Free Press business writer John Gallagher, an author of a few books on Detroit himself, is hosting an online chat with Sugrue at noon today.

Sugrue recently told Gallagher that he leans "toward the pessimistic side" on the continuum of views about the future of Detroit.

Jump in the conversation below. They'll start at noon today.

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