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Detroit to go bankrupt in less than a month
RT ^ | 22 November, 2012

Posted on 11/21/2012 7:20:31 PM PST by Founding Father

The city of Detroit, facing a serious cash crisis, is set to go bankrupt by the end of this year and would put city workers on furlough unless it strikes a deal with the city council that would bring in $30 million before Dec. 14.

Detroit has been in financial turmoil for years, losing a quarter of its population in the past decade and facing a shrinking auto industry that has reduced tax revenues. The Detroit City Council gave the mayor the option to hire a financial advisor and in return receive $30 million by the end of the year.

But the Council on Tuesday voted 8-1 to delay the decision on the deal, which would pay the Miller Canfield Law Firm $300,000 to advise Mayor Dave Bing. The deal would have released $10 million in bond money on Tuesday and another $20 million in December.

The Council decided not to authorize the contract due to suspicions that Miller Canfield has conflicts of interests, since the firm handles other city business. The Council was also concerned that the firm’s contract may not be legal, since it was not prepared or approved of by the city’s chief on-staff lawyer. Council members were also upset that Bing only presented them with one law firm, denying them options to choose from.

"The Council’s rejection of the Miller Canfield contract means the city will not receive the first $10 million scheduled for release today,” Bing said in a statement. “As a result, it will be more difficult for the city to maintain its liquidity until the receipt of property tax revenues beginning in January. Today’s vote is one more example of how City Council has stalled our efforts to bring financial stability to the city of Detroit."

Some blame the mayor for the denied funds, claiming that his limited options gave the Council no choice but to reject the proposal.

“Why is Mayor Bing putting gthe city’s finances at risk by marrying himself to one law firm?” City Council President Charles Pugh told reporters.

If a deal cannot be struck within the upcoming weeks, then those who will suffer most are Detroit’s government employees. Bing plans to put city workers on furlough on Jan. 1 to save cash if fails to receive the much-needed money from the law contract. With a $30 million cash shortfall, the city would temporarily lay off thousands of workers to avoid bankruptcy. The only city workers who would be able to keep working are police officers, firefighters, EMS workers, or employees of departments that raise revenue for the city.

The City Council also rejected a proposed contract to overhaul the Detroit Water and Sewerage Department, proposing to cut 81 percent of its workforce in an attempt to save cash.

“If we don’t stop this, there will be nothing left of the city of Detroit,” Michael Mulholland, secretary treasurer of the American Federation of State, Council and Municipal Employees Local 207, told the Detroit Free Press. With a city that has already lost much of its population due to declining jobs, cutting the workforce with furloughs and layoffs is only worsening the crisis. At the current rate, Detroit is set to hit a weekly cash flow of $4.1 million in mid-December and drop to negative $4.8 million at the end of the year.


TOPICS: Business/Economy; Culture/Society; US: Michigan
KEYWORDS: bankrupt; detroit
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Coming to a city near you.
1 posted on 11/21/2012 7:20:40 PM PST by Founding Father
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To: Founding Father

Check the Detroit Public Library for the missing cash.


2 posted on 11/21/2012 7:22:43 PM PST by Yo-Yo (Is the /sarc tag really necessary?)
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To: Founding Father

The commie lib ‘RATS did a great job with Detroit. I wonder how soon it’s going to be before the rest of America goes in the sewer.


3 posted on 11/21/2012 7:23:31 PM PST by FlingWingFlyer (Amnesty - Obama's bailout of Mexico. Barry sticks it to America again!)
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To: Founding Father

oh well


4 posted on 11/21/2012 7:24:46 PM PST by Doogle ((USAF.68-73..8th TFW Ubon Thailand..never store a threat you should have eliminated))
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To: FlingWingFlyer

You’d think someone in the media would notice the correlation, wouldn’tcha?


5 posted on 11/21/2012 7:24:55 PM PST by Baynative
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To: Founding Father

OK, what do you guys want to sell off. Send me a list and I’ll get back to you.


6 posted on 11/21/2012 7:26:02 PM PST by Right Wing Assault (Dick Obama is more inexperienced now than he was before he was elected.)
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To: Founding Father
Prior to the election, "Rolling Stone" magazine ran an article on what America would be like if Romney were elected, and drastic cuts in government funding were rammed through by nasty Republicans. The article opened with the this (I paraphrase): "Want to know what America would look like under President Romney? You can go to Detroit now and see what it would look like."

Yeah. Detroit. It's the Republicans' fault.

7 posted on 11/21/2012 7:26:48 PM PST by ClearCase_guy (Global Warming is a religion, and I don't want to be taxed to pay for a faith that is not mine.)
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To: Springman; cyclotic; netmilsmom; RatsDawg; PGalt; FreedomHammer; queenkathy; madison10; ...
An emergency manager might have saved them. Oops.

Personally I suspect the governor is the one who called in the FBI who are now investigating the Detroit PD and raiding libraries.

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8 posted on 11/21/2012 7:27:33 PM PST by cripplecreek (REMEMBER THE RIVER RAISIN!)
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To: Founding Father

I thought it was bankrupt for years.


9 posted on 11/21/2012 7:27:39 PM PST by o-n-money
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To: Baynative

The “media” is next. The state controlled “media” is having a hard time staying afloat now. Wait until ObamaCare kicks in. LOL!


10 posted on 11/21/2012 7:28:37 PM PST by FlingWingFlyer (Amnesty - Obama's bailout of Mexico. Barry sticks it to America again!)
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To: Founding Father
OK .. a city has no money, so it's going to strike a deal with itself ...

Got it.

11 posted on 11/21/2012 7:29:59 PM PST by knarf (I say things that are true ... I have no proof ... but they're true)
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To: Founding Father

Gee, that’s a darn shame.


12 posted on 11/21/2012 7:31:06 PM PST by dinodino
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To: FlingWingFlyer

Actually I think much of America is a lot further down that sewer than we realize. Detroit hasn’t been propped up they way many American cities have been. Money has gone to Detroit but there’s been no pretense of doing anything for the city. The money has gone into a few pockets.

Cut the gravy train to Chicago and she’s gonna burn.


13 posted on 11/21/2012 7:32:48 PM PST by cripplecreek (REMEMBER THE RIVER RAISIN!)
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To: Founding Father

“If we don’t stop this, there will be nothing left of the city of Detroit,” Michael Mulholland, secretary treasurer of the American Federation of State, Council and Municipal Employees Local 207, told the Detroit Free Press.

Michael, enough of this financial stuff! Did you the watch Jerry Springer Show? Opera?


14 posted on 11/21/2012 7:34:03 PM PST by Mark (For the first time in my life, I'm no longer proud of my country.)
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To: Founding Father

Wow - it sucks to be them.

Now go pay your taxes, Detroit is going to need a bailout. :)


15 posted on 11/21/2012 7:34:42 PM PST by Tzimisce (What do you do when every every branch of the government is corrupt and aligned against you?)
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To: FlingWingFlyer

“The commie lib ‘RATS did a great job with Detroit. I wonder how soon it’s going to be before the rest of America goes in the sewer.”

Detroit has had “black leadership” since 1974. Coleman Young was the principal architect of the fall of Detroit. He was mayor for some twenty years! Now they have a former NBA basketball player as mayor. They’ve all pandered to the “Free Sh!t Folks,” and you can see where it has gotten them.


16 posted on 11/21/2012 7:40:12 PM PST by vette6387
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To: Mark

AFSCME ranks right up there with the SEIU in my book.

I wonder how they feel knowing that even the private sector unions voted against their attempted prop 2 power grab? LOL


17 posted on 11/21/2012 7:40:31 PM PST by cripplecreek (REMEMBER THE RIVER RAISIN!)
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To: o-n-money
I thought it was too. I checked the date of the article because I swear I read the same story about the mayor bringing in cronies, the city lawyer being left out, and the council balking... Everything reminds me of the movie Groundhog Day. I'm sure if I drive my SUV into a gravel pit tonight, I'll wake up to “I Got You Babe” tomorrow morning.
18 posted on 11/21/2012 7:40:31 PM PST by uncommonsense (Conservatives believe what they see; Liberals see what they believe.)
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To: Founding Father

+Detroit to go bankrupt in less than a month>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

I thought it was liquidated already a couple decades ago. It certainly looks like that.


19 posted on 11/21/2012 7:40:31 PM PST by cunning_fish
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To: Founding Father

Couldn’t be. Obama saved Detroit.


20 posted on 11/21/2012 7:43:33 PM PST by SandyInSeattle (2 Corinthians 4:8)
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