Michigan takes over bankrupt Detroit

9b4bdetroit Michigan takes over bankrupt Detroit

“There’s probably no city that’s more financially challengedin the entire United States,” Snyder said earlier this month,claiming that the city lacked a plan to reduce its $14 billiondebt. “We need to start moving upward with the city ofDetroit.”On March 1, Snyder declareda state of fiscal emergency for Detroit, which has a deficit ofmore than $300 million. Detroit Mayor Dave Bing was given a 10-dayperiod to request a hearing on the decision, after which Snyder wasable to appoint an emergency financial manager for Detroit – orchoose to withdraw his decision.Days after the move, the Detroit City Council voted to challengethe governor’s declaration, claiming that the city does not need anemergency manager.“We feel like we have the tools necessary to do it, thatsomebody else does not have to come in and do it for us,”Council President Charles Pugh told the Associated Press.Mayor Bing subsequently released a statement in which he agreedwith the Council, but said he will not take actions to prevent themove and further complicate the decision regarding the city’sfuture.“We need to end the drama and infighting and understand that,whether we like it or not, an emergency financial manager is comingto Detroit,” he said in the statement. “Otherwise, it willbe a more elongated and painful process.”The governor is expected to announce the emergency statetakeover on Thursday afternoon, putting an end to the long declineof America’s most poverty-stricken city. He will likely appoint alawyer with experience managing corporate bankruptcies to handleDetroit’s finances and deficit.The most likely candidate is 54-year-old Kevyn Orr, aWashington, DC-based partner in the law firm Jones Day, an unnamedsource familiar with the selection told Reuters. Orr previouslyhelped manage Chrysler’s bankruptcy. He has also served as directorof the executive office of the United States Trustees and asassistant general counsel for the litigation and bankruptcy sectionof the Resolution Trust Corporation.Detroit’s emergency financial manager will have a difficult jobfixing a city that has been struggling with deficits for nearly 10years. Many of its residents have been unable to pay their taxesand since 2000, the city has lost about 25 percent of itspopulation. More than a third of Detroit’s population lives inpoverty. The city’s unemployment rate is 18.2 percent, which ismore than twice the national average of 7.7 percent. With immensedebt and lack of funds, the city has been slowly crumbling. Brokenstreetlights remain unrepaired, there is a lack of law enforcement,and public transportation has started to fall apart.The city is ridden with crime and corruption; Detroit topped 400homicides in 2012, marking it the second deadliest year per capitain Detroit history. And the city’s former mayor, Kwame Kilpatrick,was this week convicted of two dozen federal charges of corruptionand bribery. Poor conditions have prompted thousands of formerresidents to leave the city. The number of residents today isequivalent to about half of the city’s population in the year 1950- the year Detroit’s population peaked.“I think we have to learn to make the best out of a badsituation,” Mayor Bing told the Associated Press inanticipation of the emergency takeover. “The state and the citywill have to work together to get us out of this.”

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Michigan takes over bankrupt Detroit

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