Detroit eligible for bankruptcy protection: U.S. judge

[Adam]

Detroit eligible for bankruptcy protection: U.S. judge

[justify](Reuters) - Detroit is eligible for the biggest municipal bankruptcy in U.S. history because the city is broke and negotiations with its thousands of creditors were unfeasible, a federal judge said on Tuesday in a wide-ranging ruling that also said the city could cut retiree pensions.

The ruling by U.S. Judge Steven Rhodes marks a watershed in the history of Detroit, once the cradle of the U.S. auto industry and now a symbol of urban decay and mismanagement.

Detroit's state-appointed emergency manager, Kevyn Orr, had painted bankruptcy as Detroit's best bet for a return to financial stability, and Rhodes' ruling will now give Orr and other civic leaders an opportunity to test that argument.

[....]

Detroit's labor unions, retirees and pension funds, all of which likely will bear the brunt of austerity measures Orr plans to impose, had argued against the city's bankruptcy in a nine-day eligibility trial. Orr has said he plans to impose a restructuring plan by the end of the year.

Rhodes also said that the city could cut pensions as part of the restructuring, despite the argument that Michigan's constitution protects them from being slashed. However, Rhodes warned he will not rubber-stamp any pension cuts.

"Nobody should interpret this holding, that pension rights are contract rights, to mean that this court will necessarily confirm any plan of adjustment to impair pensions. It will not casually or lightly exercise the power under federal bankruptcy law to impair pensions," Rhodes said.

He declined to stay the bankruptcy proceedings as potential appeals proceed through the courts. He also turned down an effort to allow any appeals of his ruling to go directly to the 6th Circuit U.S. Court of Appeals. Rhodes declared that motions to appeal the case must first be filed in bankruptcy court. Rhodes previously stayed all state court action in the case.

[....]

Detroit is burdened by $18.5 billion in debt as it struggles to provide even the most basic services to the city's 700,000 residents. About 40 percent of the city's streetlights do not work and about 78,000 abandoned buildings litter the city, whose population peaked at 1.8 million in 1950.

In order to meet federal eligibility requirements, Detroit had to prove that it is insolvent, it was authorized to file for bankruptcy and that it negotiated with creditors in good faith or that negotiations were impractical.

City unions, retirees and pension funds had objected in court to Detroit's filing, contending during a nine-day trial in November that Orr did not negotiate in good faith and drove the city into bankruptcy court instead. Orr, a former bankruptcy lawyer, was appointed in March by Michigan Governor Rick Snyder, a Republican.[/justify

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To date, based upon what I've seen, I still really like Kevyn Orr. He strikes me as a 0.0% bullshit kind of guy. He did one of the Sunday shows back around March or April and he absolutely, positively refused to get sucked into the political BS, saying that his job was to do whatever he had to do to get the city back on track. I really liked that about him.

[Billy Jingo]

And a separate issue, the future of the collection of the Detroit Institute of Arts, a prized city asset, has drawn attention inside Detroit and around the world. The museum includes paintings by Vincent van Gogh and Henri Matisse, an original cast of Auguste Rodin's "The Thinker," and a fresco mural by Mexican artist Diego Rivera.

Orr, in remarks after Rhodes' ruling on Tuesday, said only about 500 pieces of the museum's collection might be affected by Detroit's bankruptcy. He declined to offer any details but said an announcement will be made soon.

And the vultures circle, looking for the best bits of the carcass they created.

Galling.

[gary m]

And a separate issue, the future of the collection of the Detroit Institute of Arts, a prized city asset, has drawn attention inside Detroit and around the world. The museum includes paintings by Vincent van Gogh and Henri Matisse, an original cast of Auguste Rodin's "The Thinker," and a fresco mural by Mexican artist Diego Rivera.

Orr, in remarks after Rhodes' ruling on Tuesday, said only about 500 pieces of the museum's collection might be affected by Detroit's bankruptcy. He declined to offer any details but said an announcement will be made soon.

And the vultures circle, looking for the best bits of the carcass they created.

Galling.

I wouldn't bet the ranch on this, but it wouldn't surprise me to see Richard Manoogian, Mike Illitch or one of the other Detroit area billionaires buy the collection and just change the signs to "from the collection of..."
Much of the art displayed in the Detroit Institute of Arts does not belong to the city or has been bequeathed with a "no sale or possession reverts to heirs" clause.

[Adam]

And a separate issue, the future of the collection of the Detroit Institute of Arts, a prized city asset, has drawn attention inside Detroit and around the world. The museum includes paintings by Vincent van Gogh and Henri Matisse, an original cast of Auguste Rodin's "The Thinker," and a fresco mural by Mexican artist Diego Rivera.

Orr, in remarks after Rhodes' ruling on Tuesday, said only about 500 pieces of the museum's collection might be affected by Detroit's bankruptcy. He declined to offer any details but said an announcement will be made soon.

And the vultures circle, looking for the best bits of the carcass they created.

Galling.

Welcome to bankruptcy. If you have assets, the court has the right, indeed the obligation, to make you liquidate those to satisfy creditors as much as possible.

City art museums are nice to have, but if the city's broke, it's time to move that off the books. They need to either sell that as a whole asset to let someone run through a private foundation or whatever, or else they need to sell the art work to whomever will bid the most for it. I'm sorry if that offends someone's artistic sensibilities, but the fact is that if you're broke and owe me money, and you've got a Renoir hanging in your living room, then sorry, but you're going to have to sell that sucker. Sucks to be you, but you should have managed your money better and then this wouldn't be happening.



I'm not really sure who the "vultures" are that you're talking about here. This most certainly was not Kevyn Orr's doing. This is the end result of fifty years of absolutely reckless fiscal irresponsibility by pretty much the entire Detroit and Wayne County governments, from dog-catcher right through to the mayor's office.

[Billy Jingo]

Welcome to bankruptcy. If you have assets, the court has the right, indeed the obligation, to make you liquidate those to satisfy creditors as much as possible.

City art museums are nice to have, but if the city's broke, it's time to move that off the books. They need to either sell that as a whole asset to let someone run through a private foundation or whatever, or else they need to sell the art work to whomever will bid the most for it. I'm sorry if that offends someone's artistic sensibilities, but the fact is that if you're broke and owe me money, and you've got a Renoir hanging in your living room, then sorry, but you're going to have to sell that sucker. Sucks to be you, but you should have managed your money better and then this wouldn't be happening.



I'm not really sure who the "vultures" are that you're talking about here. This most certainly was not Kevyn Orr's doing. This is the end result of fifty years of absolutely reckless fiscal irresponsibility by pretty much the entire Detroit and Wayne County governments, from dog-catcher right through to the mayor's office.

We all have our Gods to appease, I suppose.

[Adam]

We all have our Gods to appease, I suppose.

Gods? No.

Creditors? Yes.


If you want to give up your pension and the city bonds you have paid for without a fight, you go right ahead, but don't expect everyone else to whom Detroit owes money to do the same.

[scott]

We all have our Gods to appease, I suppose.

You're equating the intentional destruction of a religious statue and a broke city having to sell some expensive art?

[Gingersnap]

You're equating the intentional destruction of a religious statue and a broke city having to sell some expensive art?

No kidding! Wouldn't the world have better off if the raging Muslims had sold the statues in auction? Then we (the human "we") would still have them to enjoy.

Mammon is a lot friendlier to art than Allah is.

[phillygirl]

And a separate issue, the future of the collection of the Detroit Institute of Arts, a prized city asset, has drawn attention inside Detroit and around the world. The museum includes paintings by Vincent van Gogh and Henri Matisse, an original cast of Auguste Rodin's "The Thinker," and a fresco mural by Mexican artist Diego Rivera.

Orr, in remarks after Rhodes' ruling on Tuesday, said only about 500 pieces of the museum's collection might be affected by Detroit's bankruptcy. He declined to offer any details but said an announcement will be made soon.

And the vultures circle, looking for the best bits of the carcass they created.

Galling.

What should be done with the art?

[scott]

What should be done with the art?

I wonder how Bok can say that art collectors caused Detroit's problems.

[Adam]

I wouldn't bet the ranch on this, but it wouldn't surprise me to see Richard Manoogian, Mike Illitch or one of the other Detroit area billionaires buy the collection and just change the signs to "from the collection of..."
Much of the art displayed in the Detroit Institute of Arts does not belong to the city or has been bequeathed with a "no sale or possession reverts to heirs" clause.

Essentially, that is what has happened.