Detroit files for Chapter 9 bankruptcy amid staggering debts

[W.G.Ewald]

Detroit files for Chapter 9 bankruptcy amid staggering debts | Detroit Free Press | freep.com

The City of Detroit filed this afternoon for Chapter 9 bankruptcy protection in federal court, laying the groundwork for a historic effort to bail out a major U.S. city that is sinking under billions of dollars in debt and decades of mismanagement, population flight and loss of tax revenue.

The filing begins a 30- to 90-day period that will determine whether the city is eligible for Chapter 9 protection and define how many claimants might compete for the limited settlement resources that Detroit has to offer. The bankruptcy petition would seek protection from creditors and unions who are renegotiating $18.5 billion in debt and other liabilities.

"The fiscal realities confronting Detroit have been ignored for too long. I'm making this tough decision so the people of Detroit will have the basic services they deserve and so we can start to put Detroit on a solid financial footing that will allow it to grow and prosper in the future," said Gov. Rick Snyder. "This is a difficult step, but the only viable option to address a problem that has been six decades in the making."

 

[Armand2REP]

$18.5 billion in debt, that is more than some countries of millions.

Sent from my iPhone 5 using Tapatalk 2

 

[W.G.Ewald]

Flashback: Obama boasted in 2012: 'We refused to let Detroit go bankrupt' | WashingtonExaminer.com

 

[Commando]

Detroit's been struggling and dying a slow death for decades now. Its demise was a result of a failure to diversify (i.e. over-reliance on the auto industry), poor planning (i.e. failure to change its pension and other financial plans after its population began to decline), rampant crime (i.e. rise of heroin trade and gangs), and liberal/union/democratic policies that weren't in its best interests.

Detroit could do well by learning from the experiences of Pittsburgh, a once steel powerhouse that faced extensive losses when cheaper steel from overseas markets flooded the region. They managed to get along by diversifying into providing higher-quality steel, as well as robotics, medicine, and other industrial needs.

Detroit needs to use this opportunity to restructure and rebuild itself.

 

[Energon]

Flashback: Obama boasted in 2012: 'We refused to let Detroit go bankrupt' | WashingtonExaminer.com

You do realize that he was talking about the automobile manufactures and not the city itself yes?

Detroit's been struggling and dying a slow death for decades now. Its demise was a result of a failure to diversify (i.e. over-reliance on the auto industry), poor planning (i.e. failure to change its pension and other financial plans after its population began to decline), rampant crime (i.e. rise of heroin trade and gangs), and liberal/union/democratic policies that weren't in its best interests.

Detroit could do well by learning from the experiences of Pittsburgh, a once steel powerhouse that faced extensive losses when cheaper steel from overseas markets flooded the region. They managed to get along by diversifying into providing higher-quality steel, as well as robotics, medicine, and other industrial needs.

Detroit needs to use this opportunity to restructure and rebuild itself.

Yes, agree with all of the above. The one thing I would add however is Pittsburgh's investment into top tier academic institutions.

 

[Armand2REP]

The real hurdle to Detroit re-balancing the finance are pension payments. How do you cut off tens of thousands of pensioners who worked a lifetime to earn it?

 

[W.G.Ewald]

You do realize that he was talking about the automobile manufactures and not the city itself yes?


Yes, agree with all of the above. The one thing I would add however is Pittsburgh's investment into top tier academic institutions.

The underlying economic problem for the city of Detroit is the pensions of government workers, which was also a big problem for the automobile manufacturers with its workers.

Good point about Pittsburgh.

 

[Energon]

The underlying economic problem for the city of Detroit is the pensions of government workers, which was also a big problem for the automobile manufacturers with its workers.

Good point about Pittsburgh.

Detroit's problems exceeded far beyond pension funds. I don't think we can compare Detroit's demise with that of the auto industry because if anything the auto industry has actually rebounded since Obama's cash infusion. But as I said this is a false equivalency and has very little to do with partisan politics.

 

[SPIEZ]

Detroit is the city where I want to settle down in the future

Disappointed by the news.