Detroit bankruptcy

Politics & Culture
4:45 pm
Mon December 2, 2013

Stateside for Monday, December 2nd, 2013

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.

Stateside
4:41 pm
Mon December 2, 2013

Is Detroit eligible for bankruptcy protection? We'll find out tomorrow

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.

Opinion
8:22 am
Mon December 2, 2013

What happens after the Detroit bankruptcy ruling

Lessenberry commentary for 12/2/13

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. 

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Politics & Government
8:18 am
Wed November 27, 2013

Lessenberry talks abortion coverage, millions to small businesses in Detroit and bankruptcy

Peter Martorano Flickr

Week in Michigan Politics interview

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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Politics & Government
7:12 am
Tue November 26, 2013

In this morning's headlines: DET bankruptcy, fungal meningitis, abortion coverage

Morning News Roundup, Thursday, Oct. 13, 2011
User: Brother O'Mara Flickr

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.

Stateside
4:52 pm
Mon November 25, 2013

Detroit called 'post-apocalyptic' by city outsiders

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.

Politics & Government
9:50 pm
Thu November 21, 2013

Report questions assumptions behind Detroit bankruptcy

 A new report says declining revenues and bad Wall Street deals—not out-of-control spending or generous pension benefits--contributed the most to Detroit’s bankruptcy.

The report from the left-leaning think tank Demos also accuses Emergency Manager Kevyn Orr of attacking the problem in “inappropriate” ways that are “not rooted in fact.”

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Stateside
4:37 pm
Thu November 21, 2013

How do cities get in a 'death spiral,' and how can we stop it?

In July, Detroit became the largest city to file for bankruptcy in U.S. history.
Bob Jagendorf Flickr

Ever since Detroit’s became the biggest in American history to seek bankruptcy protection, the term “death spiral” has been in the spotlight.

The spiral often begins with promises made to municipal workers. Pensions and health coverage are becoming too much for many cities and states to bear. But the law tells mayors and governors that those pension plans need to remain intact.

As pension costs mount, they try raising taxes, or turning to the municipal bond market. And when those doors are slammed shut, what happens? Essential services get cut, pink slips start flying, and businesses and homeowners get out of town, leaving behind a smaller and poorer population even less able to cover a city’s soaring costs.

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Detroit Bankruptcy
12:03 pm
Thu November 21, 2013

Judge expected to rule on Detroit bankruptcy soon, how could it go?

It's anyone's guess as to when the ruling will come, but most seem to think the bankruptcy will be approved in some form.

If it's not, at least one expert seems to think bad things could happen. From Crain's Detroit Business:

"If the bankruptcy is disallowed, frankly, expect all hell to break loose," said Anthony Sabino, a lawyer who teaches business law at St. John's University in New York. "Detroit will be at the mercy of its creditors in individual lawsuits spread amongst federal and state courts. That chaos alone could doom the city."

Hell breaking loose? Doomed?

Well, a bomb wouldn't drop, but the downward financial spiral would certainly continue as creditors that haven't been paid would sue for the money they're owed.

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Politics & Government
7:59 am
Thu November 21, 2013

In this morning's headlines: Budget director's brother, Detroit bankruptcy, Heidelberg burns

User: Brother O'Mara flickr

Budget director's brother proposes $5 million state project

"A company run by the brother of Michigan’s budget director proposed a $5 million project that is part of the state budget. The company is now bidding to win the contract," Rick Pluta reports.

Report blames Wall Street for Detroit bankruptcy filing

"A new report says declining revenues and bad Wall Street deals contributed the most to Detroit’s bankruptcy. The report from the think tank Demos argues that Detroit IS bankrupt — but that’s because of the city’s cash flow problems, not its debt," Sarah Cwiek reports.

Another Heidelberg house up in flames

"Fire has destroyed another house that makes up the Heidelberg Project outdoor art installation in Detroit. The fire burned early this morning at the structure known as the Penny House on the city's east side. A building known as the "House of Soul" was destroyed by fire earlier this month," the Associated Press reports.

Politics & Culture
5:02 pm
Mon November 18, 2013

Stateside for Monday, November 18th, 2013

When we talk about Detroit's bankruptcy filing, the point seems to almost always be made that this is historic. That Detroit is the largest city in U.S. history to seek bankruptcy protection. But, that was almost not the case. In the mid 1970's New York City was on the brink of financial crisis. On today's show: What can Detroit learn from New York's comeback?

And, as of today, the University of Michigan Hospitals and Health Centers will no longer sell sugar-sweetened drinks. It's a not-too-subtle push to get healthy, but is it taking away our choice as a consumer? Is it going too far?

Also, the Michigan Women's Hall of Fame has just announced its latest list of inductees. We took a closer look at one of these influential Michigan women.

First on the show, Republicans in Lansing are split over whether people who bankroll so-called “issue ads” should be allowed to remain anonymous.

Issue ads attack or support politicians or causes without using what are called “magic words" like “vote for” or "oppose." Unlike campaign ads, the money behind issue ads can be anonymous.

But, late last week, Michigan Secretary of State Ruth Johnson proposed new rules that would require disclosure of issue-ad donations.

Johnson said, too often, issue ads are just thinly disguised political ads, and people should know who is paying for them.

But, many Republicans disagree. In fact, within hours of Johnson's proposal, the GOP-led Senate acted quickly to amend a campaign finance bill that would make Johnson's new rules illegal.

Rich Robinson, Executive Director of the Michigan Campaign Finance Network, and Jonathan Oosting, Capitol reporter for MLive.com, joined us today.

Stateside
5:02 pm
Mon November 18, 2013

Detroit almost wasn't the largest city to file for bankruptcy

Peter Martorano Flickr

In virtually every discussion and report about Detroit's bankruptcy filing, the point is made that this is historic. That Detroit is the largest city in U.S. history to seek bankruptcy protection.

But, that nearly was not the case. New York City was a hairs-breadth away from earning that unenviable distinction in 1975.

We wondered what comparisons could be made between Detroit's crisis today and New York's in the 70's, and if there are lessons Detroit could learn from New York's recovery.

Out next guest has taught at Yale for 46 years, he was part of five New York City governments and he is a noted urban planner, educator and author of The Planning Game: Lessons from Great Cities and The American City: What Works, What Doesn’t.

Alex Garvin joined us today from New York City.

Listen to the full interview above.

Economy
3:59 pm
Fri November 15, 2013

The 10 Michigan communities with the highest legacy costs

Detroit has the third-highest legacy debt per capita.
Patricia Drury Flickr

To call Detroit’s legacy costs underfunded would be, well, an understatement.

According to the city’s numbers, Detroit’s pension and retiree healthcare funds are about $9.2 billion short.

But Detroit is not the only Michigan city with major legacy costs — not by a long shot.

Legacy costs, or costs undertaken by local government for future use, have been taken on by more than 280 of Michigan’s 1,800 communities, according to data compiled by Bridge Magazine.

And while Detroit has the highest amount of total unfunded legacy cost, the per capita numbers show a slightly different picture.

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Opinion
7:26 am
Fri November 15, 2013

Is there hope for Detroit after bankruptcy?

Lessenberry commentary for 11/15/13

As we know, no major city has ever been in the position Detroit is in now. What was once the Arsenal of Democracy, a proud and vibrant city of two million people, is now in bankruptcy court, asking a federal judge to let it be reborn.

The city has lost two thirds of its population and far more of its wealth. There are tens of thousands of abandoned buildings.  Earlier this year, Detroit was taken over by the state, and is now being run by a state-appointed emergency manager.

City services are so bad the voters, the vast majority of them black, just elected a mayor who is a white political boss from the suburbs, in the desperate hope that he could somehow fix things. Mike Duggan clearly intends to try.

The scope of the problem is almost beyond imagining, in part because for too long, nobody was willing to admit the facts, not even to themselves. Now, the city has been forced into a rendezvous with reality.

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Law
7:00 am
Fri November 15, 2013

Detroit bankruptcy judge rejects bid to keep loan terms secret

The judge in Detroit’s bankruptcy case has denied a bid to keep some details of a controversial loan agreement secret.

Judge Steven Rhodes ruled Thursday that the city must disclose all the terms of a proposed loan from the British financial giant Barclays. That loan deal is as complex as it is controversial.

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Politics & Government
7:00 am
Fri November 15, 2013

In 'a big surprise' to Detroit leaders, state to pay little for city's restructuring consultants

Detroit’s elected leaders are shocked that the state has put a strict limit on how much it will pay for the city’s many restructuring consultants.

Under a memorandum of understanding signed last year, the state agreed to reimburse Detroit for half the cost of those outside contractors.

But Detroit’s finance director told the City Council Wednesday those reimbursements would be capped at $5 million.

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Stateside
4:20 pm
Thu November 14, 2013

Could a private fund save both the DIA and public pensions?

The Detroit Institute of Arts
Flickr

If anything’s clear coming from Detroit’s bankruptcy case it is this: the city needs new solutions.

Daniel Howes, Detroit News business columnist, wrote his column today on a proposal from Chief U.S. District Judge Gerald Rosen. Rosen is proposing a new private fund that could have a major impact on the future of the Detroit Institute of Arts, the city’s retired workers and bankruptcy proceedings.

Listen to the full interview above.

Detroit bankruptcy
1:03 pm
Wed November 13, 2013

Judge will soon decide whether Detroit will get bankruptcy protection

The next steps for Detroit? This man will soon decide. Judge Steven Rhodes.
John Meiu Detroit Legal News Publishing LLC

Today is the last day U.S. Bankruptcy Judge Steven Rhodes will accept documents from all sides of the Detroit bankruptcy case.

Rhodes will then look at all the evidence and decide whether the city of Detroit can reorganize itself under Chapter 9 bankruptcy laws. 

Rhodes has heard a lot. The city's future path will be up to him.

His decision will be based upon a) whether the city truly has no other options to pay its debts, a b) whether the city negotiated in good faith with its creditors prior to saying bankruptcy was the only way.

No one seems to be arguing that the city has a viable way to pay its debts. And Daniel Howes of the Detroit News argues that defining "good faith" negotiations in exceedingly difficult in this case.

That's because Detroit owes money to nearly 100,000 creditors.

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Politics & Government
2:36 pm
Sat November 9, 2013

Detroit retiree health coverage OK through February

(file photo)
Steve Carmody/Michigan Radio

DETROIT (AP) - The city of Detroit is suspending a plan to change retiree health insurance, at least through February.

Emergency manager Kevyn Orr says his staff will negotiate with a committee created to represent retirees during the city's bankruptcy case. He hopes it will lead to a long-term solution.

The city had proposed shifting retirees to Medicare, effective Jan. 1. Retirees under age 65 would have been given a $125 monthly stipend to get their own insurance.

Politics & Government
7:51 am
Sat November 9, 2013

Lawyers wrap case in Detroit bankruptcy trial

(file photo)
Steve Carmody/Michigan Radio

DETROIT (AP) - Attorneys have ended final arguments in a rare trial to determine whether Detroit can become the largest municipality to fix its finances in bankruptcy court.

The daylong remarks Friday for and against a Chapter 9 reorganization now will be sorted out by Judge Steven Rhodes. He could take days to make the decision.

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