Disaster Feared if Bankruptcy Disallowed for Detroit

Chaos and lawsuits galore


After a nine-day trial, Judge Steven Rhodes must decide whether Detroit really qualifies for the court's help to fix its awful long-term finances _ including $18 billion debt. Although they haven't offered specifics, officials predict a "free-fall crisis" if the city is found ineligible and warn that the improved services, such as those streetlights, could suffer.

The judge's decision is expected any day.

"If the bankruptcy is disallowed, frankly, expect all hell to break loose," said Anthony Sabino, a lawyer who teaches business law at St. John's University in New York. "Detroit will be at the mercy of its creditors in individual lawsuits spread amongst federal and state courts. That chaos alone could doom the city."

He compares it to animals in the wild _ "wolves rending the carcass piece by piece."

Emergency manager Kevyn Orr, the state appointee who now controls Detroit's checkbook, acknowledges things will get worse if bankruptcy is rejected, but he's not saying exactly how bad.