The surprise is not that Detroit is filing for bankruptcy. The road signs have been pointing toward this conclusion at least since Emergency Manager Kevyn Orr took the job – and the leash – offered to him by Gov. Rick Snyder.
Detroit has been headed toward bankruptcy for years, because Detroit’s accounts have been screwed for years. Management of Detroit’s finances has been the equivalent of a shell game for quite some time, so those who say that the bill has come due are correct on that point. I am 100 percent opposed to Orr’s appointment, and I will never stop saying that his presence here is illegitimate. Gov. Snyder’s decision to disregard the will of his own voters and force them to accept an EM was nothing short of criminal.
But it would be a lie to say that Orr is responsible for the bankruptcy. As a matter of fact, I suspect the only reason he didn’t move to file on his first day behind the desk was because he had to at least appear to be trying alternative strategies. Strategies like offering to take Detroit’s creditors on a bus ride through the Detroit ghettoes so they could see firsthand how bad things are here. And then, after a good cry, find it within their hearts to forgive all debts because surely no creditor would have the heart to collect on a debt after seeing that the debtor is having a hard time, right?
Yeah. Strategies like that. Well thought-out strategies. Brilliant strategies. Strategies that make it so wonderfully clear why Michigan is paying this man Orr his $275,000 salary; to offer bus rides to creditors. And then, when the creditors decide they’d rather not take the ride because they don’t want their pictures taken and because they would have to sign a form that basically lets the city off the hook in case they get shot or killed or whatever (because, after all, they were going to the ghetto and chances are they would indeed stand out just a tad), then Orr moves forward on what was most likely the plan all along.
Funny thing is, we really didn’t need to pay Orr all this money to file bankruptcy. I’m pretty sure that’s a course of action our own elected leaders could have figured out how to do on their own. And once the bankruptcy is in place, once again, why exactly do we need Orr? Because we’re the biggest municipality to file bankruptcy means we need an emergency manager to make sure everything goes OK?
If the judge authorizes the city to move forward with a Chapter 9 bankruptcy case, Orr would propose a plan of reorganization. This could take weeks, months or years. Bankruptcy court allows the city to restructure its operations and its balance sheet. This could involve budget cuts, layoffs, consolidation, the sale of assets, slashing union contracts, selling assets and dramatically reducing city debts, including outstanding bonds.
The city will attempt to win support for the reorganization plan from creditors, including secured bondholders, general obligation bondholders, unions and pension boards. If the city wins enough support, the plan would be put to a vote — and with enough support, the city could emerge from bankruptcy. Without enough support, the judge could tell the city it must continue to negotiate with creditors.
In other words, we might not even be approved for bankruptcy, which means we’d be back to square one. And since a sizable number of creditors have already signaled they don’t exactly plan to swallow the numbers that Orr has been trying to feed them then it’s all but a certainty they’re gonna take this fight to the mat. Maybe they’ll prevail, maybe they won’t, but didn’t I tell you this was gonna get real ugly?
Maybe it’s just me, but I thought Orr’s purpose was to be our salvation. To save us from ourselves. To make a way out of no way. For a quarter million dollar salary I damned sure expected more than this, even if he did sign on to assist Gov. Snyder in stealing democracy from his own citizens. You mean to tell me there isn’t even honor among thieves anymore?
In a tweet today, Orr said, “We’re changing the culture of entitlement here in Detroit, Michigan.”
By filing for bankruptcy? Really?
No, Kevyn. Last I heard, we’re still entitled to a democracy. That’s the thing about theft; the rightful owner doesn’t mind putting up a fight to get back what’s rightfully his.