What Happens When A City Goes Bankrupted?

What Happens When A City Goes Bankrupted?

State-appointed emergency manager Kevyn Orr, right, speaks as Detroit Mayor Dave Bing listens Thursday. (AP Photo/Paul Sancya)

Detroit Mayor: We’ll ‘Have to Make the Best of It’

After city files for Chapter 9 bankruptcy

By John Johnson, Newser Staff

The emergency manager who filed Detroit’s historic bankruptcy today says residents don’t have to worry about basic services getting cut in the interim, reports WXYZ. “Nothing changes from the standpoint of the average citizen’s perspective,” says Kevyn Orr. At a joint news conference, Mayor Dave Bing added, “Now that we’re here, we have to make the best of it.” Some other odds and ends:
•Close call: The bankruptcy was filed at 4:06pm, a mere 5 minutes before a judge convened an emergency hearing to consider a request from the city’s pension boards to block such a filing, reports the Detroit News. “It was my intention to grant you your request completely,” said the judge.
•Detroit Free Press editorial: It’s too bad Orr and the city’s creditors couldn’t reach a deal. And, who knows, this may force one. “Either way, the pieces are finally in place for a definitive resolution of the disputes that have held Detroit hostage to its legacy of fiscal mismanagement. That’s something to look forward to on this rainiest of days in Detroit’s darkest summer.”

•White House: The president will “closely monitor” developments, said a spokesman, whose statement also urged city and state leaders to keep working with creditors on a solution. The White House has previously made clear that the city won’t be getting a federal bailout, reports the Detroit News.
•Now what? “The move is bound to set off months, if not years, of legal wrangling, asset sales and cuts to benefits for Detroit workers and retirees, including 20,000 on city pensions,” says the Wall Street Journal’s main story. “Owners of the city’s bonds are expected to battle with retirees and others for pieces of the city’s diminished wealth.”

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s