Is Detroit Headed For Bankruptcy?
DETROIT (WWJ) - It's expected to be a huge week in Detroit, as we expect to find out whether the city will file for bankruptcy.
In the meantime, the state Attorney General's Office has until today to respond to one lawsuit filed last week. It seeks to block Governor Rick Snyder from giving Detroit's Emergency Manager Kevyn Orr authorization to seek Chapter 9 bankruptcy. Many believe that's where Detroit is headed, including community activist Helen Moore.
"It looks like it's already bankruptcy the way they're talking and the way they're trying to get everybody to take a little portion of the money that's owed. But really they're not looking at the facts. The facts are that these people put us in the situation we're in. They won't give us our money back from the state," says Moore.
Meanwhile, Orr continues looking for ways to restructure about $20-billion in city debt. If he can't negotiate terms with all parties involved, the only other option is bankruptcy. Orr is asking some creditors to take pennies on the dollar.
But Moore believes the state helped put Detroit in financial crisis.
"They won't do the things that we think will help the situation and they certainly haven't really sat down and talked to the people, and that is lacking," says Moore.
She adds, "You just can't come in as a dictator and say I'm going to take all your rights, I'm going to take your right to vote and I'm going to tell you what to do, that's so disrespectful."
One consultant believes Detroit could still pull out a miracle and create a historic debt restructuring that keeps the city out of bankruptcy; another city official notably said the federal government should bail out the city, though the president has made no indication that's a possibility. Meanwhile, the Detroit school district got a new emergency financial manager Monday after losing more than 100,000 students and millions of dollars in per-pupil funding since 2000.
