Tag archive for Kevyn Orr

Four unanswered questions about the Detroit bankruptcy

Capably fulfilling journalism’s obligation to be “the first draft of history,” The Detroit Free Press yesterday published an 8,000-word account of how the city’s bankruptcy was resolved. This “backstory” bookends “How Detroit went Broke“ (6,000 words; September 2013),” in which Free Press reporters explained the …

Municipal bankruptcy is about cutting retiree healthcare

Rhodes: OPEB is unsecured. Unlike retiree pensions, it had “no arguable constitutional protection.”
— ChristineFerretti_DN (@cferretti_dn) November 7, 2014

The real crisis in journalism now is reporters being tasked by editors to identify “precedents” in Detroit, Stockton, and other bankrupt cities. Because each case appears unique when …

Haste, not bias is what’s behind Detroit’s grand bargain

Detroit’s bankruptcy plan is finally underway and to no one’s surprise, much of the debate and controversy have concerned the inaptly named “grand bargain.”
As critics have pointed out, it’s not really a bargain or deal at all, but just a plan, for several foundations and …

Needed: an independent analysis of Detroit’s leadership capacity

The Detroit bankruptcy’s “expert witness” has issued her report, the first truly independent assessment of whether the city has any shot at solvency. In reading through it, one can’t help but wonder what Richard Ravitch would have said. Ravitch is not an accountant, which is …

Why Detroit should not sell its art: the realist’s case

“A collection of the quality and range of art in the DIA would be impossible to recreate in current times.” -Artvest Partners
Detroit retirees never would have voted to accept its bankruptcy plan and cut their pensions had the city not decades ago acquired an art …

The great discount rate flip flop

In debates over the public pension discount rate—used to value the long-term liability—retirement systems are thought to be among the greatest beneficiaries of the more aggressive ~8% range. They certainly rank among its strongest advocates, equating defense of their right to estimate liabilities as they …

Structured gimmickry

Detroit’s “plan for adjustment” maps out the city’s fiscal future to a degree of detail rare among local governments (some projections stretch out for 40 years). It has to do this. To be approved, Detroit’s debt cutting request must satisfy bankruptcy law’s “feasibility” requirement that …

Michigan voters oppose state bailout of Detroit

When governments approach insolvency, its leaders go on the lookout for someone to bail them out. There is a rush to raise revenue from wherever, to dig deeper for federal grants, or to ask the state for extra cash. Detroit is doing all of these. …

Municipal bankruptcy and war

Rhodes MemeBankruptcy, like war, is an extraordinary means for resolving disputes that appear irresolvable under ordinary conditions. Much of what Detroit seeks to accomplish in bankruptcy could have been accomplished outside of federal court, but only with great difficulty

Is time on Detroit’s side?

Cate Long is right. The 15 month timetable artificially imposed on Detroit’s bankruptcy is showing strain. While negotiations with retirees, swap counterparties, bond insurers and the suburbs would not have gone great guns under any scenario, they are looking even less successful when measured against …