Bankruptcy in Detroit, Michigan
On July 18, 2013 Detroit became the largest city in the United States to file for Chapter 9 Bankruptcy protection. The estimated amount of the city’s long term debt is about $18 million. Around February of this year, Kevin Orr was appointed as the city’s emergency financial manager in an effort to turn the city’s financial crisis around. There are many reasons why the city of Detroit is bankrupt: a shrinking tax base caused by the decline in population, program costs for retiree healthcare & pension, borrowing to cover budget deficits, poor record keeping, antiquated computer systems and government corruption.
The population of Detroit has declined from its peak of 1.8 million in 1950 to about 700,000 in recent years. Kevin Orr hopes Detroit can emerge from bankruptcy by the late summer or fall of 2014 and states that they are treating the process “as expeditiously as possible.” Governor Rick Snyder is optimistic about the situation and looks to turn it from a negative to a positive. “Now is our opportunity to stop 60 years of decline,” he says. He believes bankruptcy will enable the city of Detroit to come out with a stronger, better city and a more efficient format that will help the city grow.
The city is still continuing its plans for a bond issue to fund a new arena for the Detroit Red Wings, a project that would cost $444 million which some are skeptical about. But Governor Snyder is confident that continuing the project makes good economic sense since it’s estimated to create 8,000 construction jobs as well as the jobs it will create once the project is complete.
Although some are uncertain that declaring for bankruptcy is the best option, major corporations like GM who have their headquarters in Detroit, are looking forward to this “clean start for the city.” Governor Rick Snyder knows many will see it as a low point in the city’s history but thinks “it will also be the foundation of the city’s future.” If you or someone you know has been involved in an accident in Detroit or any other city in Michigan, make sure you call Motor City Accident Attorneys. Motor City Accident Attorneys know how stressful it can be and want to help you by standing up for your rights and getting you the compensation you deserve.
