Detroit's Chapter 9 bankruptcy: behind the scenes
Chapter 9 bankruptcy became near certainty for Detroit when governor appointed emergency manager
DETROIT – It is the position not a single Michigan governor in decades has wanted to be in: putting an emergency manager into Detroit where for years the finances have languished based on bad decisions and a political class that wouldn't do what needed to be done.
Detroit's situation was DEFCON 4 before the "Tough Nerd" Gov. Rick Snyder took office, but Snyder is the one who said "enough."
"This was the right thing to do. It's a difficult thing to do, because again, we need to stop Detroit going downhill and this is a way to do it," Snyder said.
Sources in Lansing told Local 4 Chapter 9 was a near certainty when Snyder made the move to appoint an emergency manager. The city already was completely insolvent with no way to borrow more. However, the possibility existed that creditors would see reason and play ball.
Some of the creditors did, such as Bank of America and Merrill Lynch, just this week. Then Detroit's two pension boards sued the governor and Emergency Manager Kevyn Orr in a move that experts said was nothing but a stall which would serve to do nothing but ratchet up the legal fees.
"Really there has been an effort for refusal on the part of so many people involved in the process to really face up to the problems," said
Sources with intimate knowledge of the process tell Local 4 it was that filing that had the governor instruct Orr to file for bankruptcy. Detroit electronically filed Chapter 9 bankruptcy at 4:01 p.m. Thursday.
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