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Judge orders Detroit to withdraw bankruptcy filing.

July 19, 2013: 4:23 PM ET


A Michigan Circuit Court Judge ruled Friday that Detroit's bankruptcy filing is unconstitutional and ordered the case be withdrawn from federal bankruptcy court.

But Michigan Attorney General Bill Schuette said in a statement soon after the decision that he intended an immediate appeal to the Michigan Court of Appeals and would seek to block this latest order from taking effect while the appeal is heard.

The order came in response to motions by lawyers for retirees and pension funds for city workers, who argue the state constitution prohibits cutting pension and retirement benefits, as has been proposed in the bankruptcy case.

The order was from Ingham County Circuit Judge Rosemarie Aquilina, the county that includes the state capital of Lansing. Aquilina had been ready to issue an order Thursday that would have blocked the filing in federal bankruptcy court, but the hearing on the motion to do so started five minutes after the bankruptcy case was filed.

It's not clear if a state court judge legally can order a party in a federal case to drop that action.

"Obviously there are constitutional issues," said Michael Sweet, a bankruptcy attorney with the California law firm of Fox Rothschild and an expert in municipal bankruptcy cases. "Anyone who thought this case would be resolved quickly was sorely mistaken. There is too much at stake for too many people. Clearly the gloves are coming off."

Detroit became the largest municipal bankruptcy in U.S. history Thursday evening when emergency manager Kevyn Orr filed the case in federal bankruptcy court in Detroit. Orr had been appointed to oversee Detroit's finances by Gov. Rick Snyder. Snyder authorized the bankruptcy filing. Aquilina's order says that Snyder must now order Orr to withdrawal the case.

by Anonymousreply 3107/30/2013

Will the retired public workers get pennies on the dollar for their retirement funds?

I thought the bankruptcy plan was a way to allow the city to sell off some of its remaining assets to pay into the public retirement fund?

I would be terrified if I was a retired Detroit firefighter/police officer, etc. and think that my retirement funds were not guaranteed. Is that the case?

by Anonymousreply 207/19/2013

[quote] I thought the bankruptcy plan was a way to allow the city to sell off some of its remaining assets to pay into the public retirement fund?

What assets? Detroit's real estate market is non-existent. I can't imagine what type of assets they could have.

by Anonymousreply 407/19/2013

R4, You haven't been paying attention. The contents of the Detroit Institute of the Arts is worth several million.

by Anonymousreply 507/19/2013

Several million is nothing compared to an 18 billion debt.

by Anonymousreply 607/19/2013

It's not nothing

by Anonymousreply 707/20/2013

It is all Diane's fault.

by Anonymousreply 807/20/2013

I'm shocked

by Anonymousreply 907/20/2013


[quote] it cannot preempt or preclude a federal right

R1- our government has been "preempting" and "precluding" the US Constitution for +170 years.

by Anonymousreply 1007/20/2013

You just can't stop posting while drunk, can you, R10? Oh, well... more fun for the rest of us.

by Anonymousreply 1107/20/2013


by Anonymousreply 1207/22/2013

As jarring as the reality may be to accept, Detroit’s decision last week to declare bankruptcy should not be regarded as a one-off in the US municipal market – which is what the bond-peddlers are now telling their clients. The aftershocks of the largest municipal bankruptcy in US history will be staggering, and Detroit will set important precedents.

Municipal bankruptcies have historically been rare for a number of reasons – including the states’ determination to preserve their credit ratings, their access to cheap funding and the stigma of bankruptcy. But, these days, things are very different in the world of municipal finance.

At the root of the problem is the incentive system that elected officials used to face. For decades, across the US, local leaders ran up tabs for future taxpayers; they promised pensions and other benefits for public employees that have strong legal protection. That has been a great source of patronage for elected officials: they can promise all sorts of future perks to loyal supporters (state and local workers) with very little accountability on the delivery of those promises.[...]

leaders across the country cannot continue as they have. They must choose sides because there is simply not enough money to go around. Will they side with taxpayers, unions or the municipal bondholders? If they back residents, money will be directed to underfunded public services at the expense of pensions and bondholders. If they side with the unions, social services will continue to be cut and the risk to bondholders will increase considerably. If they side with bondholders, social services and pensions are at risk.[...]

There are five more towns like Detroit in Michigan alone. There are many more municipalities across the country in similar positions.

by Anonymousreply 1307/23/2013

[quote]At the root of the problem is the incentive system that elected officials used to face. For decades, across the US, local leaders ran up tabs for future taxpayers; they promised pensions and other benefits for public employees that have strong legal protection. That has been a great source of patronage for elected officials: they can promise all sorts of future perks to loyal supporters (state and local workers) with very little accountability on the delivery of those promises.[...]

I disagree with this comment. It is not so much that politicians promised pensions, it is that subsequent politicians failed to maintain that promise. Every politician wants to build a bridge, not maintain the one built by a previous administration.

by Anonymousreply 1407/24/2013

[quote]When Detroit public employee unions were in control and greedy they negotiated for some of the best pensions ANYWHERE. When the city started falling apart, they refused to negotiate any changes. Now they will be forced to accept big changes. Live by the union, die by the union.

Shut the fuck up, you dumbass Repuke!

by Anonymousreply 1507/24/2013

Is this happening in all cities or just majority minority cities?

by Anonymousreply 1607/24/2013


The major cities are in the same boat.

LA, NYC, Chicago, Miami--- all of them are on the brink of bankruptcy. They're just hiding it better than Detroit.

by Anonymousreply 1707/25/2013

Just read where the Chinese are buying up Detroit like crazy sight unseen. They cannot bring money out of the country but they can send it to buy property. I think this would be hilarious if the Chinese took over. Man, the natives would choke.

by Anonymousreply 1807/26/2013


Sadly, property in Detroit will be worth more than the property in the dozens of "ghost cities" the Chinese government has built over the last two decades.

Central planning never works.

by Anonymousreply 1907/27/2013

It’s been just over a week since Detroit filed for the largest municipal bankruptcy in U.S. history and, so far, there are more questions than answers about how this will all shake out. On Wednesday, a U.S. Bankruptcy judge ruled Detroit’s Chapter 9 filing can proceed but local unions, pension funds and other creditors will continue to try and stop the process.

Regardless of how the legal proceedings unfold, Meredith Whitney thinks she knows what will happen as a result of Detroit’s bankruptcy filing: “staggering aftershocks” for the muni bond market and “important precedents” for other state and local governments.

“We know [Detroit’s bankruptcy] is a game-changing event for certain,” says Whitney, author of Fate of the States and founder of Meredith Whitney Advisory Group LLC. “It will galvanize other municipalities to either get their act together or follow Detroit’s lead.”

Asked what other municipalities might follow Detroit’s lead into bankruptcy, Whitney cited the five other Michigan cities currently under emergency management: Flint, Pontiac, Ecorse, Allen Park and Benton Harbor. She also reiterated her concerns about the states of New Jersey and

The Wall Street Journal recently cited Oakland, Philadelphia and Chicago as other big cities with the potential to follow Detroit’s lead but Whitney declined to mention other cities.

“I’m not sure it’s constructive to name towns [and] sound the alarm,” she said. “But there are numerous others across the country. Detroit is hardly unique.” Of course, Whitney gained increased attention – and considerable criticism – when she sounded the alarm on 60 Minutes in late 2010. At that time, she predicted “a spate of municipal bond defaults. You could see 50 sizeable defaults. Fifty to 100 sizeable defaults. More. This will amount to hundreds of billions of dollars' worth of defaults."

Nothing close to that level of muni bankruptcies has occurred, to date, but ask yourself: Was Whitney 'dead wrong' on 60 Minutes, as her critics continue to claim, or just early?

And check the accompanying video to hear specifics on why Whitney believes Detroit’s bankruptcy is such a “game changing event” and whether she believes the city of Detroit can be 'restructured' via bankruptcy as were automakers GM and Chrysler.

by Anonymousreply 2007/28/2013

R11 on this thread. Just hit "troll dar" and you will see her shit.


I'm just about to piss myself!

I "lost" many of the starred threads on my Thread Watcher. This has happened a few times, usually when I post something that makes the webcuntress bleed extra runny.

This time I decided that every week I would take a screen shot and then google them.

Well, during my google I discovered that our

[quote]Oh, dear


[quote]Dear Heart

Troll was the same stupid bitch that was defending the invasion of Iraq and Iran, supporting the subsidies to Wal Mart and ADM and Intel, defending the NSA spying, defending the Federal Reserve bailouts of the banks, defending the loss of civil liberties due to the PATRIOT ACT and encouraging the invasion of Egypt, Syria, Libya and defending Israel at every turn.

She must work for the government.

If this thread disappears...think nothing of it.

by Anonymousreply 2107/28/2013

R21, you're doing it again: spamming your threads with the same post over and over again. That is what gets your threads deleted, not their content.

Oh, and you're lying, of course, both clumsily and stupidly, because you're getting your ass handed to you over and over again and you *really* don't like it.

by Anonymousreply 2207/28/2013


Aren't you doing the same by using the same cut and paste?

by Anonymousreply 2307/28/2013

Chicago is next!

Any unexpected fiscal shocks will leave them bankrupt.


Ironically last year, now-retiring City Comptroller Amer Ahmad argued that the city’s debt load was not “troubling” because, "We still have a very strong bond rating. Our fiscal position is getting better every year and we are aggressively managing our liabilities and obligations" (very much awhat the ECB's Mario Draghi tells the world when he gives the periodic monthly update of European capital markets during the central bank's press conference). It is ironic because last week, Moody’s downgraded Chicago from Aa3 to A3 in an unprecedented three notch cut in the city’s bond rating, citing Chicago’s "very large and growing" pension liabilities, "significant" debt service payments, “unrelenting public safety demands” and historic reluctance to raise local taxes that has continued under Emanuel.

Moody’s noted that the city’s total fund balance at the close of 2012 was $231.3 million and that Chicago has just $625 million in “leased asset reserves.” Had the city fully funded its $1.5 billion “actuarially required contribution” to its four under-funded city employee pension funds in 2012 alone, “these two reserves would have been entirely depleted,” Moody’s said.

The “unassigned” balance is $33.4 million. Experts recommend a cash cushion of at least $200 million for a budget the size of Chicago’s, according to the Civic Federation. The city ended 2009 with an unallocated checkbook balance of just $2.7 million.

by Anonymousreply 2407/28/2013

[quote]Aren't you doing the same by using the same cut and paste?

There's a difference, moron. The first is that, unlike you, I'm not lying. And the second is that I don't really give a damn if your threads are deleted or locked. If you're too stupid to recognize that your behavior is directly responsible for such actions, that's perfectly fine with me. I'll be laughing at you and laughing even more at your whining and paranoid conspiracy theories.

by Anonymousreply 2507/29/2013


Point out one lie.

by Anonymousreply 2607/29/2013

All of R21.

by Anonymousreply 2707/29/2013

And what's funny is that you *know* you were lying when you wrote that.

by Anonymousreply 2807/29/2013


You haven't defended the bank bailouts?

You haven't defended the NSA?

You haven't defended giving money to the auto companies?

You haven't defended printing trillions for the big corporations?

You haven't defended the spying? The wars overseas?

Please trolldar yourself, because someone is defending these things in your name.

by Anonymousreply 2907/29/2013

Changing your story already, R29? This is what you accused me of:

[quote]Troll was the same stupid bitch that was defending the invasion of Iraq and Iran

Nope, you're lying.

[quote]supporting the subsidies to Wal Mart and ADM and Intel

Nope, you're lying.

[quote]defending the NSA spying

Nope, you're lying.

[quote]defending the Federal Reserve bailouts of the banks

That is not an accurate statement as to what the Federal Reserve is doing. I defend what the Fed is actually doing, not what exists mostly in your fevered imagination. And, so far, you haven't been able to find a single statement or prediction of mine that's incorrect, which is why you've had to resort to such clumsy lies.

[quote]defending the loss of civil liberties due to the PATRIOT ACT

Nope, you're lying.

[quote]and encouraging the invasion of Egypt, Syria, Libya

Nope, you're lying.

[quote]and defending Israel at every turn.

Nope, you're lying.

And you *still* know you're lying because you haven't been able to point to a single thread or a single post of mine.

by Anonymousreply 3007/29/2013

WHEN Greece ran into financial trouble three years ago, the problem soon spread. Many observers were mystified. How could such a little country set off a continental crisis? The Greeks were stereotyped as a nation of tax-dodgers who had been living high on borrowed money for years. The Portuguese, Italians and Spanish insisted that their finances were fundamentally sound. The Germans wondered what it had to do with them at all. But the contagion was powerful, and Europe’s economy has yet to recover.

America seems in a similar state of denial about Detroit filing for bankruptcy . Many people think Motown is such an exceptional case that it holds few lessons for other places. What was once the country’s fourth-most-populous city grew rich thanks largely to a single industry. General Motors, Ford and Chrysler once made nearly all the cars sold in America; now, thanks to competition from foreign brands built in non-union states, they sell less than half. Detroit’s population has fallen by 60% since 1950. The murder rate is 11 times the national average. The previous mayor is in prison. Shrubs, weeds and raccoons have reclaimed empty neighbourhoods. The debts racked up when Detroit was big and rich are unpayable now that it is smaller and poor.

Other states and cities should pay heed, not because they might end up like Detroit next year, but because the city is a flashing warning light on America’s fiscal dashboard. Though some of its woes are unique, a crucial one is not. Many other state and city governments across America have made impossible-to-keep promises to do with pensions and health care. Detroit shows what can happen when leaders put off reforming the public sector for too long.

Inner-city blues

Nearly half of Detroit’s liabilities stem from promises of pensions and health care to its workers when they retire. American states and cities typically offer their employees defined-benefit pensions based on years of service and final salary. These are supposed to be covered by funds set aside for the purpose. By the states’ own estimates, their pension pots are only 73% funded. That is bad enough, but nearly all states apply an optimistic discount rate to their obligations, making the liabilities seem smaller than they are. If a more sober one is applied, the true ratio is a terrifying 48% . And many states are much worse. The hole in Illinois’s pension pot is equivalent to 241% of its annual tax revenues: for Connecticut, the figure is 190%; for Kentucky, 141%; for New Jersey, 137%.

by Anonymousreply 3107/30/2013
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