Detroit bankruptcy

DIA

This next story is a call to anybody with $170 million to spare.

And a major fondness for art.

By now, you’ve heard about the group of philanthropists who’ve raised $330 million to strike a “grand bargain” with Detroit’s creditors.

Their goal is to raise half a billion dollars to save city-owned art at the Detroit Institute of Arts from being sold off in the city’s bankruptcy.

But that grand bargain may still require a small miracle.

Fair or not, bankruptcy pitting art against pensioners

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Flint City Council could gain power back today

The Flint city council has been largely powerless in the two years since the appointment of an emergency manager. But that begins to change this evening. Emergency manager Darnell Earley says the City Council will now be asked to get more involved in city decisions.

Detroit swap deal to resume today

"A bankruptcy court hearing on Detroit's renegotiated deal to pay off two banks in an interest rate swaps deal is scheduled to resume today," The Associated Press reports.

Lawmakers to discuss which standardized test students will take this year

"State lawmakers will begin hearings this week to determine which standardized test Michigan students will take starting next spring. State education officials say the Smarter Balanced Assessment is the only good option to replace the Michigan Educational Assessment Program – or MEAP," Jake Neher reports.

Detroit emergency manager Kevyn Orr moved to “freeze” pension benefits for some city retirees — then suspended that action as the city and pension fund representatives talk in mediation.

Orr quietly issued that order late last month. It affects members of Detroit’s General Retirement System—not police officers or firefighters, who have their own, separate pension fund.

Detroit mayor-elect Mike Duggan will have broad powers to run the city’s day-to-day business.

Duggan and emergency manager Kevyn Orr have reached a power-sharing agreement that gives Duggan control over most city functions.

While Duggan will have substantial operational powers, he’s also promised not to “interfere” with any of Orr’s financial control.

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

The judge in Detroit’s bankruptcy case says creditors can appeal his recent eligibility ruling directly to a higher federal court.

Judge Steven Rhodes ruled earlier this month that Detroit is eligible to proceed with its historic bankruptcy case.

He also ruled that city pensions can be cut in federal bankruptcy court — despite a public pension guarantee in Michigan’s state constitution.

City unions, pension funds and retiree groups immediately said they intended to appeal both decisions.

user: jodelli / Flickr

DETROIT (AP) — Unions and Detroit pension funds are back in court to try to persuade a judge to allow them to appeal a decision that lets the city fix itself in bankruptcy.

They want Judge Steven Rhodes to put the Dec. 3 decision on a fast track to a federal appeals court in Cincinnati. A hearing is set for today.

Lawyers for emergency manager Kevyn Orr say it's more appropriate to file an appeal when the case is over. Unions, retirees and pension funds say Rhodes was wrong to find Detroit eligible for Chapter 9 bankruptcy protection.

They're especially disappointed that the judge will allow pension cuts. Detroit says pension plans are underfunded by $3.5 billion.

Orr hopes to file an $18 billion reorganization plan by January.

Two Obama administration officials were in Detroit this week to highlight White House efforts to help Detroit.

Labor Secretary Thomas Perez and Education Secretary Arne Duncan visited Macomb Community College.

That school is one of eight Michigan community colleges sharing a $25 million grant to “create and expand innovative partnerships between community colleges and businesses” to train more workers for in-demand jobs.

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Anti-abortion coverage bill approved

"The Michigan Legislature has approved a petition initiative that will require people to buy a separate health insurance policy for abortion coverage. The measure cannot be vetoed by Governor Rick Snyder. But it could be challenged via another petition drive," Rick Pluta reports.

What bills could move through on the last day of session

"Big legislation that could win final approval today would expand a state reform school district to failing schools beyond Detroit and ease the potential discontinuation of traditional land line service. Legislators also plan to update campaign laws heading into an election year by doubling donation limits and keeping intact rules for political ads over objections from the secretary of state," the Associated Press reports.

DIA now involved in bankruptcy talks

"The Detroit Institute of Arts has been allowed into talks on how to protect pieces in its collection during Detroit's bankruptcy. Museum officials say they're mobilizing public support to help implement a fundraising strategy that will meet the city's needs and ensure the well-being of the museum," the Associated Press reports.

Detroit Mayor Dave Bing says he’s pleased with how his administration has “moved the needle forward on Detroit’s future.”

Bing talked about his accomplishments and challenges as mayor in a farewell speech to the Detroit Economic Club Wednesday.

DETROIT (AP) - A federal judge has cleared the way for Detroit's Public Lighting Authority to immediately sell $60 million in bonds to begin fixing thousands of broken streetlights.

Judge Steven Rhodes issued his order Friday - three days after he allowed Detroit to become the largest U.S. city to enter bankruptcy.

Total financing for the lighting plan is expected to reach $210 million.

Rhodes' ruling also means $12.5 million in annual utility taxes approved by the state Legislature to back the bond sale will not be affected by the bankruptcy.

Steve Carmody / Michigan Radio

All eyes are on Detroit this week, following Tuesday’s historic ruling on Detroit’s eligibility for bankruptcy. For those living outside the city, it's easy to separate themselves from Detroit's problems. 

But many experts say Detroit is not alone.

Detroit is not Michigan's only city that faces enormous budget challenges. Unfunded liabilities and retiree debt are adding up all across our state.

Ted Roelofs, a contributing writer to Bridge Magazine, recently wrote a piece that argues that other cities in Michigan will not be immune to rising legacy costs that, in part, did Detroit in.

Roelofs and John Pottow, a bankruptcy expert at the University of Michigan, talk with us about the future of other Michigan cities in the wake of Detroit’s bankruptcy.

Listen to the full interview above.

The Detroit Institute of Arts
Flickr

What’s going to happen with the Detroit Institute of Arts?

 

That’s the question on the minds of many Michiganders after the city of Detroit was deemed eligible for Chapter 9 bankruptcy on Tuesday.

Daniel Howes, a business columnist with The Detroit News, talks with us about all things DIA – a recent appraisal of the institute’s collection, emergency manager Kevyn Orr’s interest in the museum, and a possible rescue plan cooked up by a federal judge.

Listen to full interview above. 

Rene Passet / Flickr

There was another plot turn in the long story of Detroit's struggles yesterday.

A federal bankruptcy judge looked at all the evidence and declared, yep, the city of Detroit is indeed insolvent.

It's new, for sure, but for many who have lived and worked in Detroit, it's just more of the same.

Derrick May is one the founding fathers of techno music. Detroit was the birthplace of the genre, and May has achieved a lot of success traveling around the world playing shows. (Listen to his breakout hit here.)

When I was growing up in the 1960s, there was a popular genre of fiction: Novels about the world when and after the presumably inevitable nuclear war happened.

One that I remember was set in rural Florida, one of the few places that avoided total destruction. The survivors set up what amounted to a working subsistence and barter economy. 

But for some, the psychological adjustment was impossible. The town banker sat among piles of paper money that he had always revered as sacred, and which suddenly had no value whatsoever. Unable to adjust, he kills himself.

Things are not nearly that bad in Detroit. But yesterday, there were clear signals that sacred cows really are going to be sacrificed. Public pensions were thought to be sacrosanct, protected by the state constitution. Well, they aren’t, according to Federal Bankruptcy Judge Steven Rhodes. Federal law trumps state law. 

Steve Carmody/Michigan Radio

The judge’s decision to let the city of Detroit pursue Chapter Nine bankruptcy protection could have an effect on the municipal bond market.

Municipal bonds have long been viewed as one of the safest investments out there. But bond holders may be among the biggest losers in Detroit’s bankruptcy.

Peter Martorano / Flickr

This Week in Michigan Politics, Jack Lessenberry and Christina Shockley discuss Detroit's bankruptcy eligibility.

As many observers expected, Judge Steven Rhodes ruled yesterday that Detroit is bankrupt, and that the city can proceed with its Chapter 9 filing.  Judge Rhodes said the city did not negotiate in good faith with the creditors and it was clear the state planned the inevitable bankruptcy as soon as Kevyn Orr was named emergency manager for Detroit. Judge Rhodes also said public employee pensions can be cut as part of the restructuring. He also ruled Michigan's Emergency Manager law constitutional.


On this historic day, Detroit, Michigan's largest city, is found eligible for Chapter 9 bankruptcy protection. Federal Judge Stephen Rhodes saying, "It is indeed a momentous day. We have here a judicial finding that this once proud and prosperous city is insolvent."

But, just what does all this mean for Detroit? For our state? What happens next?

This hour, we'll get answers to those questions as we're joined by Jack Lessneberry, Michigan Radio's Political Analyst, and Eric Scorsone joins us for a look at the economic consequences of the nation's largest Chapter 9 bankruptcy ever.

user Daviddje / Flickr

Let's take time now to put today's ruling by Judge Rhodes into historical context. How does the painful journey into Chapter 9 bankruptcy fit into Detroit's past, present, and most importantly, its future?

We're joined by someone who has covered the news in Michigan for five decades: Michigan Radio's political analyst Jack Lessenberry.

Listen to full interview above.

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

Michigan Radio’s Sarah Cwiek was in the courtroom today when U.S. Bankruptcy Judge Steven Rhodes ruled that Detroit was eligible for Chapter 9 bankruptcy.

Stephen Henderson, the editorial page editor of the Detroit Free Press, has been covering the bankruptcy trial on the pages of the Freep.

Sarah and Stephen talk with us in the studio today to discuss what happened today, and what it means for Detroiters.

Listen to full interview above. 

mich.gov / Michigan Government

Today, U.S. Bankruptcy Judge Steven Rhodes ruled that Detroit is eligible to enter Chapter 9 bankruptcy protection, and to cut the pensions of city retirees.

What does it mean for residents? Current city employees? City pensioners?

Eric Scorsone, a municipal finance expert from Michigan State University, talks to us about what lies ahead after today’s ruling.

Listen to full interview above.

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

U.S. Bankruptcy Judge Steven Rhodes ruled this morning that the city of Detroit is allowed to protect itself from its creditors under Chapter 9 municipal bankruptcy protection. In his ruling, Rhodes said pensions can be treated like any other debt and are subject to potential cuts. We've been following the news as it unfolds today.

Update 3:31 p.m.

Michigan Attorney General Bill Schuette issued a statement today saying he supported the bankruptcy ruling, but was "deeply disappointed" with Rhodes' ruling that pensions are eligible for cuts.

Bob Jagendorf / Flickr

 Today, Judge Steven Rhodes of the United States Bankruptcy Court ruled that while the City of Detroit did not negotiate with creditors in good faith, it did file for bankruptcy in good faith. His ruling makes Detroit eligible to file for the largest municipal bankruptcy in this country’s history.

David Shepardson, Washington reporter with the Detroit News has been following the bankruptcy. He joined us to talk about this historic ruling, and what to watch for in the coming months. 

Listen to the full interview above.

Today, virtually all eyes are on Detroit, where U.S. Bankruptcy Judge Steven Rhodes rendered his historic decision this morning. That’s exactly as it should be. There is no more important story in the state right now, and our futures are all tied in with the Motor City. But that’s not the only thing happening.

I always feel uneasy when the media’s attention strays too far from the legislature. That’s a bad idea, for the same reason leaving a two-year-old unattended in the kitchen is a bad idea. There are sharp objects, and they can hurt themselves and others.

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Judge to announce Detroit bankruptcy eligibility today

A judge is expected to announce today whether Detroit is eligible for bankruptcy. If so, Detroit will be the largest public bankruptcy in U.S. history. It has $18 billion in debt.

Anti-abortion coverage proposal moves forward

"State lawmakers will consider a proposal to put new restrictions on abortion insurance coverage in Michigan. A state board yesterday certified that Right to Life of Michigan has collected enough signatures to send its petition to the Legislature. Under the measure, women would only be able to purchase abortion coverage as a separate policy. It could not be part of standard health plans," Jake Neher reports.

State workers might get pay hike, but pay more for health care

"The state Civil Service Commission is considering giving state workers a two-percent pay increase, while requiring many of them to pay more out-of-pocket for health insurance. The proposal is meant to end a contract impasse between the state and public employee unions," Jake Neher reports.

Tomorrow will be a historic day in Detroit. That's when a federal judge will decide whether the city is eligible for Chapter 9 bankruptcy protection. On today's show, we took a look at the different ways Judge Steven Rhodes could rule.

Then, we took a look at the future of newspapers. As newsrooms get smaller, and more people hop online for information, will the industry be able to reinvent itself and keep up with the times? 

And, the U.S. Supreme Court heard arguments this morning in a case that pits Michigan against an Upper Peninsula Indian tribe. We discussed the case with Rick Pluta, who is reporting from Washington D.C..

Also, we spoke to a new Michigan music duo, The Accidentals. 

But, first on the show, the Board of State Canvassers today certified a voter-initiated petition that would put new restrictions on abortion insurance coverage in Michigan. The proposal would ban abortion coverage in standard health insurance plans. Women would only be able to purchase abortion coverage as a separate rider. The measure now goes to the state Legislature, which has 40 days to pass it. If not, it will go to voters on the 2014 ballot.

MLive reporter Jonathan Oosting joined us today to discuss the issue.

Joy VanBuhler / Flickr

Tomorrow will be one for the history books, not just here in Michigan but across the nation.

Tuesday morning is when Federal Bankruptcy Judge Steven Rhodes will rule whether or not Detroit is eligible for Chapter 9 bankruptcy protection.

Detroit News reporter Chad Livengood has covered the bankruptcy trial, and he joined us today to talk about what might happen tomorrow morning.

Listen to the full interview above.

Tomorrow morning, Federal Bankruptcy Judge Steven Rhodes will announce whether or not Detroit can file for bankruptcy. If, as expected, he does authorize this, it will mean grim times ahead.

The city almost certainly will lose some assets; creditors will get paid only a fraction of what they are owed, and elderly and retired city workers may lose at least some of their pensions.

None of this will be easy, or fun. But we all have to hope that is exactly what the judge does. Otherwise, the city will be in the position of a dying lamb among a flock of turkey buzzards.

The city has close to 100,000 creditors who together are owed probably more than $18 billion. If the judge rules Detroit is ineligible for bankruptcy, then that will take the freeze off all the lawsuits creditors filed against the city before the Motor City asked for bankruptcy protection back in July. 

Peter Martorano / Flickr

In this Week in Michigan Politics, Christina Shockley and Jack Lessenberry discuss a proposal to block abortions from being covered in basic health plans, how Warren Buffett is backing millions of dollars in an initiative to help small businesses in Detroit, and look to next week when Judge Steven Rhodes will decide if Detroit is eligible for bankruptcy.

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Federal judge will announce if Detroit is eligible for bankruptcy next week

"A judge says he'll announce Dec. 3 whether Detroit is eligible to get rid of its debts in bankruptcy court," the Associated Press reports

Michigan and federal government investigate fungal meningitis outbreak

"Michigan Attorney General Bill Schuette is joining forces with federal authorities to investigate last year’s fungal meningitis outbreak. Michigan was hardest-hit by the nationwide outbreak that’s linked to tainted steroids from a Massachusetts compounding pharmacy," Sarah Cwiek reports.

Enough signatures collected to propose a ban on abortion coverage

"Michigan abortion foes have collected enough signatures to put a proposal before lawmakers to ban abortion coverage from health plans unless a separate policy is bought," the Associated Press reports.

Detroit Skyline
Dave Linabury / Flickr

As Detroit has slid its way down the slippery slope to bankruptcy, the eyes of the world have been fixed on the Motor City.

Whether it was Time Magazine renting a house for embedded reporters, Bob Simon of 60 Minutes comparing Detroit to Mogadishu, chef Anthony Bourdain comparing Detroit to Chernobyl, using the description "post-apocalyptic," the outsiders' view of Detroit has been, to put it gently, negative.

Our next guest has raised the question: what happened when outsiders are shaping Detroit's narrative? When Detroit and its leaders and stakeholders can't articulate a consistent message, someone else is going to do it. And how is that Narrative-Shaped-By-Outsiders going to affect Detroit's destiny?

Detroit Free Press Staff Writer Mark Stryker explored this in a recent piece "Seeking Detroit's Voice: Lack of message lets others shape the narrative." He joined us today to discuss the issue.

Listen to the full interview above.

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