Judge: Detroit eligible for Chapter 9 bankruptcy - WNEM TV 5

Judge: Detroit eligible for Chapter 9 bankruptcy

Posted: Updated:
Detroit skyline- photo courtesy of WikiCommons Detroit skyline- photo courtesy of WikiCommons
DETROIT (AP) -

A judge says Detroit is eligible to fix its finances in bankruptcy court.

The ruling Tuesday clears the way for the city to come up with a plan to shed $18 billion in debt. It comes four months after Detroit sought Chapter 9 protection in the largest public filing in U.S. history.

Detroit must propose a plan to Judge Steven Rhodes, although mediators have been meeting privately with the city and creditors with the hope of striking deals.

Unions and Detroit's public pension funds vigorously opposed bankruptcy during a nine-day trial. They claim emergency manager Kevyn Orr and his team didn't negotiate in good faith before the summer filing, a requirement for a government to be eligible to shed debts under Chapter 9.

Reaction to a judge's decision that Detroit is eligible to fix its troubled finances in bankruptcy court:

------

"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." -- Detroit Emergency Manager Kevyn Orr.

------

"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.

------

"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." -- Michigan Gov. Rick Snyder, a Republican.

------

"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.

Copyright 2013 Associated Press. All rights reserved.

Powered by WorldNow
WNEM
Powered by WorldNow CNN
All content © 2014, WNEM; Saginaw, MI. (A Meredith Corporation Station) and WorldNow. All Rights Reserved.
For more information on this site, please read our Privacy Policy and Terms of Service.