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The Law Blogger is a law-related blog that informs and discusses current matters of legal interest to readers of The Oakland Press and to consumers of legal services in the community. We hope readers will  find it entertaining but also informative. The Law Blogger does not, however, impart legal advice, as only attorneys are licensed to provide legal counsel.
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Friday, June 21, 2013

Detroit: Too Big to Fail?

Here in the 313, we're used to having it rough.  This is a place where nothing comes easy.  Detroit has been existing within the shadow of a lost world-class status since the riots in 1967.

Now that Washington D.C. lawyer and Snyder-appointed emergency manager Kevin Orr has settled-in and taken a look around here in the "D", it's starting to look like this appointment may have come too late.

There is a mountain of things to correct; the deep oaken roots of 100-years of corruption need to be pulled out of the Detroit soil; it is proving very difficult.  The prospect of the largest municipal bankruptcy in United States history is now looming large; the consequences of the decades of mismanagement are coming home to roost.

Mr. Orr is zeroing-in on municipal pensioners, municipal employees, and an overall 20-billion dollar debt restructuring package.  If the restructuring fails, this mess will be placed in the hands of a federal bankruptcy judge; the state problem goes federal.

Now that the battle lines have been drawn, the unions, of course, are squawking.  They claim a multi-million dollar war chest to fight all of Mr. Orr's decisions.  Not surprisingly, none of Detroit's municipal workers want their pensions or their health care benefits cut.  Orr says these perks need to be compressed to stop the swelling of an out-of-control deficit of a non-productive municipality.

As a small business with some 20 employees here in the suburbs, we here at the Law Blogger must admit that, while we are life-long Detroiters, it is irritating to hear the sabre-rattling unions and pension managers make these legal threats when we have seen years of lavish and outlandish junkets along with a strong whiff of corrosive privilege.  Nobody involved in a City of Detroit pension needs to take a trip to Hawaii on the City's dime; under these financial straights, that is just plain wrong.

In sum, Detroit is just a promise gone bust; gone way past the point of no return.  Now an outsider, a Washington D.C. lawyer, must try to get us our city back.

What can we do, what can you do, to help...?

Post Script:  On July 19, 2013, Detroit's Emergency Manager filed a petition under Chapter 9 of the US Bankruptcy Code.  Despite the Michigan Attorney General's challenge to the petition, the Court of Appeals said the petition could proceed, and the Bankruptcy Judge in Detroit has asserted jurisdiction over the case and has stopped all challenges in state court forums.

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