Detroit bankruptcy

Politics & Government
3:56 pm
Mon October 28, 2013

Detroit bankruptcy hearings continue as EM and Gov. Snyder take stand

Detroit's skyline
Joy VanBuhler Flickr

U.S. Bankruptcy Judge Steven Rhodes is presiding over the fourth day of testimony in the Detroit bankruptcy case.

At issue...

  1. Is it true that Detroit can no longer pay its bills?
  2. Did city leaders negotiate with creditors "in good faith" before filing for bankruptcy protection?

Two of the main players in the bankruptcy filing are in court today.

Detroit's state-appointed emergency manager Kevyn Orr took the stand last Friday and again this morning.

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Politics & Government
2:54 pm
Mon October 28, 2013

Facts about the Detroit bankruptcy

Detroit skyline.
Dave Linabury Flickr

With the bankruptcy trial in full swing, we thought we'd share the following facts with you about the Detroit bankruptcy case.

 

  • State declares Detroit is in a “financial emergency” on March 1, 2013

  • Kevyn Orr appointed as Detroit’s emergency manager on March 14, 2013

  • City files for Chapter 9 bankruptcy on July 18, 2013

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Politics & Government
8:41 am
Sat October 26, 2013

Detroit City Council has no alternative to $350M loan plan to pay off city's debt

Downtown Detroit (file photo)
Steve Carmody/Michigan Radio

DETROIT (AP) - The Detroit City Council has decided not to push an alternative to a $350 million loan designed to help the city pay off some of its massive pension debt.

Council members on Friday discussed the competing plan to the post-bankruptcy petition financial proposal engineered by state-appointed emergency manager Kevyn Orr.

About $230 million from Barclays would be used to fully pay off a complicated pension debt deal involving two major creditors. The rest would be used to improve basic city services.

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Politics & Government
4:25 pm
Fri October 25, 2013

Day 3 in the Detroit bankruptcy case could bring Orr and police chief to the stand

Gerri Trager Flickr

Update 4:25 p.m.

Emergency manager Kevyn Orr has taken the stand in Detroit bankruptcy eligibility trial, for what's likely to be a brief bit of testimony before court breaks for the weekend.

The court confirmed that Governor Snyder will take the stand at 1 p.m. on Monday, regardless of whether Orr is finished testifying.

Orr follows Detroit Police Chief James Craig, who testified about the poor state of police service in Detroit when he took over the job in July 2013.

He called Detroit "the most violent city I've ever worked in" (he's also worked for police departments in Los Angeles and Cincinnati).

He said the city needs to take "bold action" to rectify its fiscal problems, but acknowledged he was "concerned" about "hiring and retention issues" if Detroit is allowed to slash pension benefits in bankruptcy.

1:11 p.m.

At issue is whether the state (mostly Gov. Rick Snyder) and city​ leaders (mostly Kevyn Orr) truly negotiated "in good faith" with Detroit's creditors.

Those who stand to lose a lot (city union workers and retired pensioners, among many others) are arguing that bankruptcy was the goal all along - that there was no "good faith" bargaining going on.

We're in Day 3 of hearings in front of the man who will ultimately decide whether Detroit will become the largest city in U.S. history to go bankrupt.

We're not expected to get a ruling from U.S. Bankruptcy Judge Steven Rhodes until mid-November.

This morning there was testimony from Kenneth Buckfire, an investment banker who worked with the city of Detroit. Buckfire was questioned about the timing of his negotiations with Gov. Snyder and the city over the city's insolvency.

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Politics & Culture
5:05 pm
Wed October 23, 2013

Stateside for Wednesday, October 23rd, 2013

A new study found that students enrolled in online charter schools are not performing as well as students in traditional brick and mortar schools. At the same time the number of virtual schools is growing. On today's show, we talked about the big business of online charter schools.

And, how do you talk about being gay and Christian? And how should we be talking about it? We spoke to the founder of the Gay Christian Network to learn more.

And, could eating local save energy and help the planet? We took a closer look at the impact of the local food movement.

Also, Jen Guerra from Michigan Radio’s State of Opportunity project joined us to give a preview of her upcoming documentary, “The Education Gap.”

First on the show, is Detroit really broke?

That’s the question before Federal Bankruptcy Judge Steven Rhodes as Detroit’s bankruptcy eligibility trial began today. His ruling could open the door for the City of Detroit blowing up billions of dollars in debt and liabilities.

As has been the case ever since the bankruptcy filing on July 18th, this is all being closely watched from coast to coast. History is being written in Judge Rhodes' courtroom.

Daniel Howes, Detroit News Business Columnist, and the former Chief of Communications for the City of Detroit, Karen Dumas, joined us today to talk about what this trial means and what we might see.

Stateside
3:33 pm
Wed October 23, 2013

What can we expect from the Detroit bankruptcy trial?

Peter Martorano Flickr

Is Detroit really broke?

That’s the question before Federal Bankruptcy Judge Steven Rhodes as Detroit’s bankruptcy eligibility trial began today. His ruling could open the door for the City of Detroit blowing up billions of dollars in debt and liabilities.

As has been the case ever since the bankruptcy filing on July 18th, this is all being closely watched from coast to coast. History is being written in Judge Rhodes' courtroom.

Daniel Howes, Detroit News Business Columnist, and the former Chief of Communications for the City of Detroit, Karen Dumas, joined us today to talk about what this trial means and what we might see.

Listen to the full interview above.

Politics & Government
11:53 am
Wed October 23, 2013

Can Detroit really get bankruptcy protection? Hearing starts today, Snyder to testify Monday

Judge Rosen will decide whether the city can protect itself from creditors under bankruptcy protection.
Detroit Legal News

Detroit is NOT in bankruptcy. Not yet, anyway.

That's what the bankruptcy hearing, which started today, is all about.

The federal bankruptcy judge will decide whether the city is allowed to protect itself from close to 100,000 creditors under Chapter 9 bankruptcy laws.

We found out this morning that Michigan Gov. Rick Snyder, the man who ultimately signed off on Detroit's bankruptcy filing, will testify in the Detroit bankruptcy trial on Monday.

Unions had served Snyder with a subpoena, but his live testimony appeared to be an unsettled issue earlier this week.

Gov. Snyder's lawyer argued that the Snyder's recent three-hour deposition should be enough.

But now his counsel says the governor wants to cooperate and will be available Monday afternoon.

Unions and pension funds want to question Snyder about approving Detroit's bankruptcy filing in July as well as other issues related to the case.

They will try to prove to the bankruptcy judge that Gov. Snyder and Detroit's emergency manager Kevyn Orr had bankruptcy in mind all along - that they did not negotiate in good faith with the creditors ahead of time.

Michigan Radio's Sarah Cwiek is live tweeting from today's hearing. Lawyers for the city have already argued in favor of bankruptcy this morning. Now it's time for those opposed to bankruptcy to argue. Here's how Cwiek sums up what their arguments will be:

 

 

Opinion
8:49 am
Wed October 23, 2013

Detroit bankruptcy on trial

Lessenberry commentary for 10/23/13

Well, today is the day that the City of Detroit goes to court. Bankruptcy court, that is. Not to settle the final details of what will happen, but to ask the judge to allow it to declare bankruptcy.

This has been going on so long now that there’s a tendency to take Detroit bankruptcy as an established fact. In fact, all that has happened is that the Emergency Manager, Kevyn Orr, filed a petition in July asking to be allowed to declare bankruptcy. Since then, we’ve been treated to a long series of revelations that make bankruptcy appear the only option.

Detroit has close to $20 billion dollars in unfunded liabilities, and next to no assets. It wouldn’t make much of a dent if they sold the entire collection of the Detroit Institute of Arts, and then sold the building to a billionaire who wanted a mausoleum.

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Politics & Government
8:39 am
Wed October 23, 2013

Jack Lessenberry talks Detroit bankruptcy, NERD fund and fracking

State lawmakers have passed bills allowing the city to keep taxing at certain rates. The legislation awaits Governor Snyder's approval.
Bob Jagendorf Flickr

Week in Michigan Politics interview for 10/23/13

In this Week in Michigan Politics, Christina Shockley and Jack Lessenberry discuss Detroit's bankruptcy eligibility trial, Governor Snyder's NERD fund, and new proposed fracking rules.

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Law
8:00 am
Wed October 23, 2013

Is Detroit eligible for bankruptcy? Crucial trial starts today

A trial to determine Detroit’s fate in municipal bankruptcy starts Wednesday.

Judge Steven Rhodes will hear arguments from city lawyers about why Detroit qualifies for Chapter 9 protection.

University of Michigan law professor and bankruptcy expert John Pottow says some city creditors will argue that Detroit’s bankruptcy filing was pre-determined--and there was no good-faith bargaining process, as the federal bankruptcy code requires.

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Politics & Government
7:42 am
Wed October 23, 2013

In this morning's headlines: Detroit bankruptcy trial and fracking rules

User: Brother O'Mara flickr

Bankruptcy eligibility trial begins today

"A trial to determine Detroit’s fate in municipal bankruptcy starts today. Judge Steven Rhodes will hear arguments about whether the city qualifies for Chapter Nine protection," Sarah Cwiek reports.

Judge says Detroit EM candidate names  should be revealed

"A Wayne County judge has ruled that state officials must turn over a list of possible candidates for the Detroit emergency manager job," Cwiek reports. This comes after a union activist filed a lawsuit saying the state violated the Open Meeting Act when it appointed Detroit's emergency manager Kevyn Orr.

DEQ proposes new rules for fracking

The Department of Environmental Quality has proposed new rules for fracking in Michigan. "The rules will require disclosure of chemicals used by developers, and make it easier for people to track where “fracking” is occurring," Rick Pluta reports

Politics & Government
9:51 pm
Tue October 22, 2013

State must release names of candidates considered for Detroit emergency manager job

State officials must turn over the names of all candidates considered for Detroit’s emergency manager job.

A Wayne County Circuit judge court ordered that information be made public Tuesday.

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Politics & Government
7:25 am
Tue October 22, 2013

In this morning's headlines: NERD fund gone, HiPark financial trouble, Det Council rejects loan deal

Morning News Roundup, Tuesday, Oct. 22, 2013
User: Brother O'Mara Flickr

Gov. Snyder shuts down NERD fund

"Governor Rick Snyder’s controversial NERD Fund will be shut down this week and replaced. Its official name is the New Energy to Reinvent and Diversify Fund. Governor Snyder used the fund to pick up costs he says should not be paid by taxpayers," Rick Pluta reports.

Highland Park could have an Emergency Manager soon

A state board has determined that the city of Highland Park has probable financial distress. Gov. Rick Snyder will next appoint a review team which could lead to an appointment of an emergency manager. According the Associated Press, "The Local Emergency Financial Assistance Loan Board also determined there is no probable financial distress in Ecorse Public Schools. A similar hearing is scheduled Wednesday for Royal Oak Township."

Detroit City Council rejects loan deal from EM

"The Detroit City Council has rejected a proposed $350 million loan deal. Emergency manager Kevyn Orr . . . planned to use most of the $ 350 million to pay off two banks. That’s controversial because he’s proposed much steeper cuts for other Detroit creditors. Bankruptcy court Judge Steven Rhodes will have to sign off on the deal," Sarah Cwiek reports.

Politics & Government
9:14 pm
Mon October 21, 2013

Detroit Council hopes to send message by rejecting loan proposal

The Detroit City Council has rejected a $350 million loan deal secured by Emergency Manager Kevyn Orr.

Orr announced the deal with the British financial giant Barclays earlier this month.

The plan was to use most of the money—about $230 million—to pay off two banks who profited from a bad interest rate swaps deal Detroit made on some pension debt years ago.

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Business
1:49 pm
Sun October 20, 2013

Marketing of Detroit heats up despite bankruptcy

Downtown Detroit (file photo)
Steve Carmody/Michigan Radio

DETROIT (AP) - Convincing executives that Detroit is a comeback city where they should hold meetings and conventions can only be characterized as the most monumental of pitches or the slickest of con jobs.

Convention and visitors bureau marketing chief Bill Bohde says they are plowing forward with a $1.6 million campaign touting it as a great comeback city even after Detroit became the largest U.S. city to seek bankruptcy protection.

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Stateside
3:37 pm
Thu October 17, 2013

Keeping up with the Detroit bankruptcy trial

Detroit Emergency Manager Kevyn Orr.
Detroit Free Press video Detroit Free Press

An interview with the Detroit News columnist Daniel Howes.

    

Today, we’re checking in with Detroit News business columnist Daniel Howes, discussing what’s going on with the Detroit bankruptcy trial.

According to Howes, two phrases for us to consider this week are “status quo” and “collateral damage.”

How has the status quo failed? And what collateral damage would happen if Judge Steven Rhodes approves the Chapter 9 petition?

Listen to the full interview above. 

Politics & Government
6:39 am
Thu October 17, 2013

In this morning's headlines: Same-sex marriage, Detroit bankruptcy, drug tests and unemployment

Morning News Roundup, Thursday, Oct. 17, 2011
User: Brother O'Mara Flickr

Judge delays decision on same-sex marriage

"A federal judge in Detroit will hold a trial before deciding whether to uphold or strike down Michigan’s ban on same-sex marriage. Judge Bernard Friedman declined to rule yesterday [Wed.] because he wants to get more facts. The challenge was brought by a lesbian couple in Oakland County who want to jointly adopt the special needs kids they’re raising together," Rick Pluta reports.

Detroit bankruptcy hearings begin

"Michigan’s emergency manager law took center stage at a hearing in Detroit’s bankruptcy case yesterday. The court is holding hearings on whether Detroit is even eligible to file for bankruptcy. A formal trial is set for next week," Sarah Cwiek reports.

Bill would end unemployment benefits if a person fails a drug test

"A state Senate panel has approved a bill that would revoke unemployment benefits if a person fails a drug test as part of a job search. The bill now goes to the full state Senate," Jack Neher reports.

Politics & Government
11:15 pm
Tue October 15, 2013

Detroit CFO resigns over controversial comments

Kevyn Orr
Credit Sarah Cwiek / Michigan Radio

Detroit’s chief financial officer, Jim Bonsall, has resigned.

Bonsall had only been on the job since mid-July. He was brought in by Detroit emergency manager Kevyn Orr, after lobbying for the job through Governor Snyder’s office.

But Bonsall’s management style alienated some. And he came under investigation after a recently-demoted city employee reported racially-charged comments he made at a meeting.

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Politics & Government
8:25 am
Sat October 12, 2013

A summary of the week's news with Jack Lessenberry

State lawmakers have passed bills allowing the city to keep taxing at certain rates. The legislation awaits Governor Snyder's approval.
Bob Jagendorf Flickr

This week in review, Rina Miller and Jack Lessenberry discuss Governor Snyder's testimony regarding the Detroit bankruptcy filing, the governor's NERD fund, and the sentencing of former Detroit mayor, Kwame Kilpatrick.

The interview can be heard below

Week in review interview for 10/12/13

Politics & Government
10:32 pm
Fri October 11, 2013

Detroit will borrow $350 million to pay off debts, boost services

Kevyn Orr
Credit Sarah Cwiek / Michigan Radio

The city of Detroit will borrow $350 million to help it through bankruptcy and restructuring.

Emergency manager Kevyn Orr announced the deal with the British financial giant Barclays Friday.

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