Detroit bankruptcy

Big news out of Washington, D.C. today: The U.S. Supreme Court has upheld Michigan’s ban on race- and gender-based affirmative action. The Court's majority held that Michigan voters were within their rights to amend the state constitution to ban the college admission policies. We dove into the decision on today's show.

Then, we checked in with Michigan Radio's auto-beat reporter Tracy Samilton about big changes that are likely in the leadership at Ford.

And, on this Earth Day, what moths can tell us about the world's changing climate.

Also, we spoke with author Joseph Tirella about his book Tomorrow-Land: The 1964-65 World's Fair and the Transformation of America.

First on the show, it's taken months of bargaining, bickering and posturing, but there have been promising advances in the Detroit bankruptcy journey.

Pieces are starting to fall into place that could complete the so-called "grand bargain" that would protect the DIA collection and soften the blow for Detroit's retirees.

First came word of a tentative deal between the city and its pensioners. A day later, the board that represents police and fire retirees gave unanimous approval to the deal.

Now it's on to the next hurdle: getting state lawmakers to approve Michigan's share of the grand bargain – $350 million.

Chris Gautz, Capitol Correspondent of Crain's Detroit Business, joined us today.

Peter Martorano / Flickr

It's taken months of bargaining, bickering and posturing, but there have been promising advances in the Detroit bankruptcy journey.

Pieces are starting to fall into place that could complete the so-called "grand bargain" that would protect the DIA collection and soften the blow for Detroit's retirees.

First came word of a tentative deal between the city and its pensioners. A day later, the board that represents police and fire retirees gave a unanimous approval to the deal.

Now it's on to the next hurdle: getting state lawmakers to approve Michigan's share of the grand bargain –$350 million.

Chris Gautz, Capitol Correspondent of Crain's Detroit Business, joined us today.

Listen to the full interview above.

The week in review

Apr 19, 2014
Jarrad Henderson / Detroit Free Press

This Week in Review, Jack Lessenberry and Rina Miller discuss the latest with the Detroit bankruptcy, road funding and the state's foreclosure rate.

user rob zand / Flickr

DETROIT (AP) - A judge has ordered the city of Detroit and the suburbs to further explore the creation of a regional water department.

Bankruptcy Judge Steven Rhodes granted Wayne County's request Thursday to have the parties sit down with a mediator.

Detroit's water department provides water to Wayne, Oakland and Macomb counties. Detroit emergency manager Kevyn Orr has expressed interest in spinning off the department as a regional agency.

But some suburban leaders are concerned about future financial burdens on their residents.

The judge says the bankruptcy case is a "unique opportunity" to keep negotiating. Otherwise, Rhodes says the opportunity "will be lost forever."

Sam Beebe

Now that Detroit’s bankruptcy is moving along, Gov. Rick Snyder is moving to secure the state’s end of a so-called “grand bargain.”

It would use $816 million to minimize city pension cuts, and protect the Detroit Institute of Arts from potential liquidation to pay off creditors.

Pension protest in Detroit.
Sarah Cwiek / Michigan Radio

This has proven to be a watershed week in Detroit’s bankruptcy case, which is now moving along at lightning speed.

On Tuesday, representatives for Detroit’s two pension funds reached tentative settlements with the city.

The deals would spare Detroit’s retired police officers and firefighters any direct cuts to their pensions, while non-uniform retirees would take 4.5% cuts.

Lester Graham / Michigan Radio

It's turning into a momentous week in Detroit's quest to exit bankruptcy.

First came a deal with two global banks: UBS and Bank of America.

Then, an agreement with leaders of Detroit's retired police and firefighters.

That was followed late yesterday by a settlement with the remaining Detroit retirees.

Daniel Howes, a business columnist with The Detroit News, talks with us about the next challenges in the Detroit bankruptcy saga.

Here’s the one thing certain about Detroit’s bankruptcy: You don’t want to play poker with Kevyn Orr.

The state-appointed emergency manager had everyone convinced city workers and retirees were facing a steep 26% cut in their pensions – a cut that would jump to 34% if they didn’t quickly approve the smaller amount.

The city was getting ready to mail them all ballots explaining the cuts and asking for their approval.

Then, voilà – yesterday, everything changed. Suddenly, negotiators came up with a deal whereby most pensions would be cut by less than 5%. Police and fire retirees pensions won’t be cut at all.

There seems little doubt that the 32,000 employees and retirees will approve this deal. Yet we need to remember two things. First of all, this is not final yet – not by a long shot.

Something else that’s still very uncertain has to happen first. The Michigan Legislature has to approve contributing $350 million to a fund designed to shore up the pensions and protect any of the work in the city-owned collections in the Detroit Institute of Arts from being possibly sold for the benefit of the creditors.

Peter Martorano / Flickr

A major piece of the Detroit bankruptcy puzzle fell into place today.

The city reached a deal with the group representing Detroit's police and fire retirees. The deal means no cuts to monthly pension checks for retired officers and firefighters. 

We were joined by Michigan Radio's Sarah Cwiek in Detroit. 

Listen to the full interview above. 

The Theodore Levin United States Courthouse in Detroit.
Andrew Jameson / Wikimedia Commons

Mediators for the federal court overseeing Detroit's Chapter 9 bankruptcy say a deal has been reached between the city of Detroit and the Retired Detroit Police and Fire Fighters Association over pension and health benefits.

The deal calls for no cuts to current pension benefits, but does cut future "cost of living" increases in their benefits.

The Association's members still need to approve the plan through a vote.

The potential deal is the first agreement the city has reached with a group of retired workers.

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.

The week in review

Apr 12, 2014
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.

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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.

The week in Michigan politics

Apr 9, 2014
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.

cash money
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.

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