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Its no secret that Detroit has taken a major hit in the recession. The former car manufacturing mecca of the western world, Detroit has now crumbled after the fall of the automotive industry. Unemployment rates are at an all-time high while the housing market remains sluggish. So what options are left for this capital city?
Detroit may need to start thinking about bankruptcy as a final solution to resolve its long-term debt. While analysts see hope in bankruptcy for the city, both Mayor Dave Bing and Governor Rick Snyder have said that Chapter 9 shouldnt be necessary in their solution.
Bankruptcy is only to be considered as a final solution under Michigan law. It should only be pursued after an emergency manager cannot reconcile the budget through any means necessary. This can involve breaking labor contracts, cutting pensions and even selling the citys assets.
While this may be good news for state employees and citizens barely surviving on pension and healthcare plans, it could be more hard times for the entire city. While Snyder says I dont want to end up with an emergency manager, its obvious that Detroit is running out of time. Snyder is urging elected officials to sign a consent agreement, which will help them slash the citys budget and eliminate thousands of city jobs. Mayor Bing seems to be behind the plan, hoping to avoid any outside intervention.
read more Will Detroit need to file for Chapter 9? | Jeff Davis Law Firm
Detroit may need to start thinking about bankruptcy as a final solution to resolve its long-term debt. While analysts see hope in bankruptcy for the city, both Mayor Dave Bing and Governor Rick Snyder have said that Chapter 9 shouldnt be necessary in their solution.
Bankruptcy is only to be considered as a final solution under Michigan law. It should only be pursued after an emergency manager cannot reconcile the budget through any means necessary. This can involve breaking labor contracts, cutting pensions and even selling the citys assets.
While this may be good news for state employees and citizens barely surviving on pension and healthcare plans, it could be more hard times for the entire city. While Snyder says I dont want to end up with an emergency manager, its obvious that Detroit is running out of time. Snyder is urging elected officials to sign a consent agreement, which will help them slash the citys budget and eliminate thousands of city jobs. Mayor Bing seems to be behind the plan, hoping to avoid any outside intervention.
read more Will Detroit need to file for Chapter 9? | Jeff Davis Law Firm
