Detroit

Detroit Bankruptcy Trial Starts

Creditors, mostly unions, want their pound of flesh first

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Reason 24/7

Detroit is in court starting today to prove the city is eligible to file for bankruptcy protection.

From the AP:

The city of Detroit will present a "mountain of evidence" to show that its perilous finances qualify for a turnaround in bankruptcy court, an attorney said Wednesday as a judge opened an extraordinary trial to determine if the largest public filing in U.S. history will go forward.

Detroit, with $18 billion in debt, filed for Chapter 9 protection in July, but it's not automatic. Judge Steven Rhodes has set aside several days to hear evidence and decide whether the city met many key steps, including good-faith negotiations with creditors, before taking drastic action three months ago.

Public unions operating in Detroit are arguing the city did not fulfill the "good-faith negotiations" requirement because municipal leaders spent months planning out how to file for bankruptcy but did not give into union demands during negotiations. The city argues it is insolvent, and that when city officials met with union representatives the meetings were well-intended even though they ended up fruitless.

The unions' role in getting Detroit to bankruptcy won't be on trial. Read about how to break an American city here and even more Reason on Detroit here.

Follow these stories and more at Reason 24/7 and don't forget you can e-mail stories to us at 24_7@reason.com and tweet us at @reason247

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  1. This was all over NPR this morning. When listing the causes of Detroit’s woes, they gave a last place hat tip to corruption. “Oh, yeah, and a teensy, weensy bit of corruption may have played a part.”

    The idea the government gets turned into a jobs program is corruption.

  2. I wonder which favored creditors will get paid and which creditors will get the shaft. Damn you, Republicans! Government cut to the bone caused this!

    1. Well, if Obama starts referring to the Bankruptcy process as ‘disorderly’, then I’d imagine it’d be whomever he fasttracks to the front of the line.

      Some SEIU local # something or other I’m sure.

  3. Imagine if the judge rules they can’t go to bankruptcy protection.

    “No bankruptcy, figure out a way to fund the pension fund.”

    “Here’s the check for the pension funding… booooiiinnnnggg”

    “Why’d you say ‘boing’ as you handed it to be?”

    “No reason… boooooiiingggg”

    Or, we get a new model in Progressive City Governance. Detroit, where taxes are collected and immediately given to city employees. No services. No trash pick up. There are police, but they don’t go anywhere, because police cars need gas, and that’s not pensions or city employees. No street lights. Just city employees, and pensioners.

    1. Everyone is entitled to a living wage whether they work or not.

    2. “OH SHIT, you just want a check? Remind me, how many zeroes is that again?”

    3. Oh for a second there, I thought “Booooooiinnngggg” was a euphemism for the hard-on democrats get when they get bailed out… again.

    4. Before long that’s what the federal budget is going to look like. Interest and transfer payments. Actual stuff that’s in the constitution? Yeah right.

    5. “Detroit, where taxes are collected and immediately given to city employees”

      If you really want to make the process more efficient, why not have us mail our taxe payments directly to the DNC. Then the Unions need not get a cut.

      1. Adopt-a-bureaucrat

  4. Unions helping to bankrupt an entity and then whining about it. That can’t be right.

    1. Normally, I would love for the judge to bar Detroit from going bankrupt, forcing Detroit to pay its ‘obligations’ out of the money it currently has.

      Unfortunately, if that happens, I’ll be reaching for my checkbook to pay for Kwame Kilpatrick’s mess. So I hope the Union doesn’t get their way.

      Of course, this is the play the Union is making. They know Detroit can’t pay its bills, so if Bankruptcy is thwarted, then they get a bailout, because they’re out of other people’s money.

  5. Just sell the damn place to Omni Consumer Products and be done with it.

    1. Fuck yea!

      Just, uh… your last name isn’t Murphy, is it?

  6. GUILTY! Guilty, guilty, guilty!

  7. I;m sure Obama and his cronies will makes sure the unions get paid off one way or another, just like the illegal prioritization of debt in the Chrysler bankruptcy.

  8. my buddy’s step-sister makes ==$82== an hour on the computer. She has been laid off for ==8== months but last month her payment was ==$19918== just working on the computer for a few hours. Here’s the site to read more
    ==========================
    http://www.works23.com
    ==========================

    1. You should send this to Detroit.

      1. Where do you think this comes from?

  9. Oh my God, no time to turn
    I got to laugh ’cause I know I’m gonna die…

    You gotta lose your mind in Detroit Rock City

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