Michigan Governor Rick Snyder has postponed his decision to appoint an emergency manager to deal with Detroit's fiscal crisis. He was expected to act after a state audit last month found that the city's long-term debt was $12 billion, $2 billion more than previously reported. But the delay won't postpone Detroit's inevitable date with insolvency.
The main issue that Snyder, a Republican, will ultimately have to confront is whether to put Detroit through a managed bankruptcy, which would be legally less nettlesome but require his maximal involvement, or a conventional Chapter 9 court process that will be legally arduous but would minimize his role. Shikha Dalmia explains why Snyder should opt for the latter.