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Thursday, July 18, 2013

Breaking: The City of Detroit, Michigan Declares a Chapter 9 Bankruptcy -- Mitt Romney's prediction was justifed

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Breaking News - IU News & Talk

Former GOP Presidential Candidate Mitt Romney's statement in the New York Times of "Let Detroit Go Bankrupt", this afternoon has become a reality and Romney declaration nearly two years ago, justified.

As predicted months in March 2013 by Independent Underground News & Talk, the City of Detroit, Michigan and its' Emergency Manager Kevyn Orr has declared America's Auto Capital of the World, Bankrupt.

Reported by local television affiliate Fox 2 News near 5:00 pm ET this afternoon, Detroit's Bankruptcy is set to become the largest US City Chapter 9 proceeding in history, along with the largest municipal bankruptcy to date outside of Jefferson County, Alabama November 10, 2011 declaration.

Orr, an former bankruptcy Attorney with Washington, D.C. Jones Day Law Firm, was hired by the state in March 2013 as the City's first Emergency Financial Manager. Kevyn Orr's mission appears to be well on its' course with the filing Thursday in federal bankruptcy court.

A number of factors -- the notably steep population, housing market decline and failure to collect revenue (taxes) due to the City by large business investors/owners -- has been blamed on Detroit's current financial insolvency. 

Michigan's largest City which borders a International Crossing to Canada, has lost a quarter-million residents between 2000 and 2010. From a population high in the 1950's of 1.8 million, today Detroit is struggling to stay above 700,000 residents. Much of the middle-class and scores of businesses also have fled Detroit, moving solely needed revenue out of the City.

From Fox 2 News Detroit: Orr lays out his reasons for Detroit bankruptcy filing - July 18, 2013

Orr provided a document (Recommendation Pursuant to Section 18(1) ofPA 436) to State Treasurer Andy Dillon and to Governor Rick Snyder: 
"Orr's letter of recommendation for bankruptcy begins with this explanation:
Since my appointment as Emergency Manager, I have endeavored to keep you, informed of all of my activities to address the financial emergency faced by the City.

In addition to providing the reports required by PA 436, I have maintained open lines of communication with both of your and the members of your staffs relating to the progress of my restructuring efforts and the challenges I have faced in that process.

I believe that both of you have been well informed of the City's financial condition and its restructuring activities and negotiations that have been presumed to date, including those efforts that began before my appointment.

Nevertheless, to support my recommendation, this letter:

(a) provides a brief background on the dire situation faced by the City;

(b) summarizes certain of the efforts taken to date to rectify the City's financial emergency;

and (c) concludes by discussing the need for Chapter 9.

Based on the current facts and circumstances, I have concluded that no reasonable alternative to rectifying the City's financial emergency exists other than the confirmation of a plan of adjustment for the City's debts pursuant to Chapter 9 of the Bankruptcy Code because the City can adopt a feasible financial plan that can satisfactorily rectify the financial emergency outside of a chapter 9 process in a timely matter.

The City is in the midst of a severe financial emergency. After decades of fiscal
mismanagement; plummeting population, employment and revenues; decaying City infrastructure; and deteriorating City services, Detroit today is a shell ofthe thriving metropolis that it once was.

Basic infrastructure is failing, such as the City's streetlights, many of which do not work. Crime is endemic. The City is plagued by blight and a diminishing quality of life. City operations, ordinances, policies and procedures must be streamlined and overhauled to implement best practices and eliminate waste and inefficiencies.

Related to this, the City's technology systems, none of which are integrated, arc in desperate need of upgrades, as they have been neglected for years. The lack of modem systems undermines many of the initiatives to establish essential improvements to City services and reduce operational costs.

For an extended period of time, the City has simply failed to make the investments required to provide its residents with an adequate quality of life, as limited resources have been diverted elsewhere. The City's urgent need to address large and growing legacy liabilities, and other substantial debts, is self-evident.

Failure to address these liabilities will prevent the City from devoting sufficient resources to providing basic and essential services to its residents."

The letter in its entirely can be read at Fox 2 News at the following link.

On Independent Underground Radio LIVE podcast and in an March 2013 article, this resource openly declared the best option Detroit's City Council could have taken prior to Emergency Manager Kevyn Orr's appointment by Governor Rick Snyder (R) was to start bankruptcy proceedings in Federal Court.

After Mr. Orr's decision today, Detroit's future --irregardless to the end results of upcoming primary and general elections for Mayor and City Council positions--- will first be guided by a Federal Bankruptcy Judge and then Mr. Orr for at least the next 15 months.

Listen to Independent Underground Radio LIVE March 2, 2013 podcast titled "Plutocracy v. Democracy: Should Detroit Declare Bankruptcy?", where host Monica RW compare a possible Chapter 9 bankruptcy declaration in Detroit, to two on-going municipal bankruptcies in Jefferson County, Alabama and Stockton, California, below.
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We will provide update on this breaking news story, as warranted.

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