Review is in: Detroit may be on its way to bankruptcy

Financial review of Detroit points to possible bankruptcy, not just emergency financial manager

Published On: Feb 18 2013 10:51:10 PM EST   Updated On: Jul 01 2013 12:24:40 PM EDT
DETROIT -

Detroit Mayor Dave Bing's staffer was happy to talk sports Monday night but not emergency managers.

The financial review is done and it's bad, as expected by pretty much every government official Local 4 spoke to. Now, the moment of truth is upon us.

At this point, an emergency manager for Detroit may not be enough.

Read previous: Detroit City Council awaits decision on emergency manager

"The emergency financial manager does not have the ability to step in and change the nature of debts, to alter pension, to alter benefits. That's where the bankruptcy court comes in," said Mike Greiner, an expert attorney in bankruptcy law with municipal experience.

Greiner sees no other option but bankruptcy for the city because of the it's long-term liabilities.

"The problems are so fundamental. The political process has shown such an unwillingness to face the problem. There is still this expectation that somebody is going to come rescue us. There is nobody there to rescue you anymore," Greiner said.

Special section: Detroit in Crisis

That means every single city employee, both past and present, should prepare themselves for a reduction in benefits. Creditors already are aware they may never get paid in full. If it does go to bankruptcy there will be pain. However, it may also offer a path to financial stability.

"Everybody is going to have to take a haircut. If they don't, then there's not going to be anything for anybody," Greiner said.