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Detroit eligible for bankruptcy protection, judge rules
 [Chicago Tribune] bankrupt, increasingly impoverished, reliably Democrat, Detroit... ruled by Democrats since 1962. A city whose Golden Age included the Purple Gang... is eligible for the biggest municipal bankruptcy in U.S. history because the city is broke and without Chapter 9 bankruptcy would continue on the path that has led it to insolvency, a federal judge ruled on Tuesday. Judge Steven Rhodes also ruled that while the city did not negotiate in "good faith" with creditors, there were too many of them to make such negotiations practical. Rhodes also said that public pensions could be cut in municipal bankruptcies. In addition, the judge said he would not stay the Detroit bankruptcy proceedings in the wake of any possible appeals, ruling that any motion for direct appeal to the U.S. 6th Circuit Court must be filed separately. The American Federation of State, County and Municipal Employees has filed a notice of appeal to the bankruptcy court. The series of rulings sets the stage for Detroit to file a plan of financial readjustment by March 1. The city's attorneys said they were not sure if the filing would occur before the end of the year. The ruling came 25 days after the end of an eligibility trial during which Detroit's labor unions, retirees and pension funds argued against the city's July 18 bankruptcy filing. The city now will begin working toward its next major move, the submission of a plan to readjust its more than $18 billion in debt. Detroit is burdened by $18.5 billion in debt as it struggles to provide even the most basic services to the city's 700,000 residents. About 40 percent of the city's streetlights do not work and about 78,000 abandoned buildings litter the city, whose population peaked at 1.8 million in 1950. Posted by: Fred 2013-12-04 |
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