Banking & Finance, Government, and Law

Bankruptcy gives Detroit 'brighter future'

December 3, 2013
| By AP |
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Leaders across Michigan have shared their reactions to a ruling Tuesday that Detroit is eligible to fix its troubled finances in bankruptcy court.

Michigan Gov. Rick Snyder said the ruling that Detroit is eligible for bankruptcy has let the city stay on a path toward a "brighter future."

The governor said that Judge Steven Rhodes' ruling affirms his own earlier difficult decision to authorize the bankruptcy filing as the last viable option to restore Detroit.

Snyder said letting the city shed its debt will lead to streetlights working, ambulances responding quickly and crime and blight shrinking.

He also expects jobs and investment to surge in Detroit.

Snyder said the judge's decision is a "call to action," and fiscal realities that have been ignored for far too long are being addressed.

The Republican governor warned "other difficult decisions" are ahead, but said Detroit and Michigan are resilient.

Statewide reactions

"We've got to start changing the conversation. We can't think that the bankruptcy is the worst thing that ever happened to us. It can help us - allow us to deal with things that should have been dealt with over the past 20 or 30 years. This opportunity today gives us a chance to move forward with a clean slate and make good decisions that will improve the quality of life for Detroit and its citizens." —Detroit Mayor Dave Bing

"This is a day in Detroit's history that none of us wanted to see. Now that Judge (Steven) Rhodes has ruled the city eligible for bankruptcy, we are about to move into the Plan of Adjustment phase that is likely to define our city government for years to come. I'm going to do everything I can to advocate on behalf of Detroit's future in this process. We need to make sure the retirees are treated fairly on the pensions they earned and we need to make certain we come out of bankruptcy in a way we can afford to provide the quality of city services the people of Detroit deserve." —Detroit Mayor-elect Mike Duggan

"We are pleased with Judge Rhodes' decision today, and we will continue to press ahead with the ongoing revitalization of Detroit. We look forward to working with all our creditors - pension funds, unions and lenders - to achieve a consensual agreement on a restructuring plan that balances their financial recoveries with the very real needs of the 700,000 citizens of Detroit." —Kevyn Orr, Detroit emergency manager

"It's a huge loss for the city of Detroit." —Sharon Levine, attorney representing the American Federation of State, County and Municipal Employees. Levine added city officials got "absolutely everything" in Rhodes' decision and planned an appeal.

"I was holding out some hope that things would go differently, but they didn't. I'm very disappointed in the decision. I'm in the hole now. I don't know what I'm going to do. How many folks are going to hire a 60-year-old woman?" —Marcia Ingram, a retired Detroit health department clerical worker, who is concerned about possible cuts to her pension in bankruptcy

"We need to recognize that this decision is a call to action. We are confronting fiscal realities that have been ignored for too long. Today's decision will allow Detroit to regain its financial footing and spark investments in key areas that will improve the quality of life for all residents and encourage growth and investment. We know that Detroit's comeback is already in motion. We've seen the revitalization in downtown and midtown. Now, with our partners in the city and beyond, we will correct the municipal problems that were decades in the making and ensure strong, thriving neighborhoods. There will be other difficult decisions as we work through this process. But Michigan and Detroit are resilient and are the comeback stories in the country. Working together we can and will make sure that reinvention happens." —Snyder

"It's time to rebuild the great city of Detroit. How we got here isn't as important as how we build a better future for Detroit's families, businesses and neighborhoods. As the bankruptcy restructuring plan advances, Gov. Snyder and Kevyn Orr have a responsibility to uphold Michigan's constitution by protecting hard-earned retiree pensions over Wall Street creditors. Moreover, I would strongly urge Gov. Snyder to empower Mayor-elect Duggan to lead the city's day-to-day turnaround efforts. It's time for Detroiters to lead Detroit." —Mark Schauer, Democratic gubernatorial candidate

"The DIA art collection is a cultural resource of the people of Detroit, the tri-county area and the entire State of Michigan. The museum's collection is the result of more than a century of public and private charitable contributions for the benefit of the public. Protected by a charitable and public trust, the collection has survived several municipal fiscal crises and financial downturns, including the Great Depression, free from threats to its existence. The DIA therefore opposes the motion filed last week by certain city creditors to allow them to form a committee to oversee the valuation and sale or 'monetization' of the museum art collection to satisfy municipal obligations. The DIA remains hopeful that the emergency manager will recognize the city's fiduciary duty to protect the museum art collection for future generations and that he will abide by the Michigan attorney general's opinion that the city holds the art collection in trust and cannot use it to satisfy city obligations. If the art is placed in jeopardy, the DIA remains committed to take action to preserve this cultural birthright for future generations." —Detroit Institute of Arts

"The success of Michigan depends on the success of Detroit, and I look forward to supporting the city restructuring in a way that leads to sustainable prosperity. However, I disagree with the judge allowing innocent retirees to pay to protect Wall Street bond holders, and I hope he lives up to his promise to only approve a plan of adjustment that is fair and equitable." —State House Democratic Leader Tim Greimel

"The declaration of Detroit's eligibility to file bankruptcy was a foregone conclusion. Anybody who has watched Detroit closely knows it is insolvent. This is just the official imprimatur. Today's ruling marks the beginning of a long and arduous process. In the end I feel genuine remorse for all the creditors who will be left holding the bag. Nobody said, however, the process is fair. Whatever impact it has on Oakland County, it will be negligible to what Detroit will endure in the months ahead." —Oakland County Executive L. Brooks Patterson

"The ruling is a stark reminder and affirmation of the critical need for the Legislature, Gov. Snyder and local elected officials to work together to develop a policy plan and vision for the future of Michigan's cities, where the vast majority of jobs and economic, cultural and educational activity occurs in our state. It is a reminder of the need to fix the state's broken municipal finance system, under which the Legislature and governor have taken about $6 billion in funds that, by state law, were supposed to go to local governments as statutory revenue sharing, including to the city of Detroit." —Jacqueline Noonan, Michigan Municipal League president and Utica mayor

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