Valdosta Daily Times

Top News

July 19, 2013

Detroit emergency manager files bankruptcy

DETROIT — Detroit on Thursday became the largest city in U.S. history to file for bankruptcy, as the state-appointed emergency manager filed for Chapter 9 protection.

Kevyn Orr, a bankruptcy expert, was hired by the state in March to lead Detroit out of a fiscal free-fall and made the filing Thursday in federal bankruptcy court.

A number of factors — most notably steep population and tax base falls — have been blamed on Detroit’s tumble toward insolvency.  Detroit lost a quarter-million residents between 2000 and 2010. A population that in the 1950s reached 1.8 million is struggling to stay above 700,000. Much of the middle-class and scores of businesses also have fled Detroit, taking their tax dollars with them.

In recent months, the city has relied on state-backed bond money to meet payroll for its approximately 10,000 employees.

Orr was unable to convince a host of creditors, the city’s union and pension boards to take pennies on the dollar to help facilitate the city’s massive financial restructuring. If the bankruptcy filing is approved, city assets could be liquidated to satisfy demands for payment.

“Only one feasible path offers a way out,” Gov. Rick Snyder said in a letter to Orr and state Treasurer Andy Dillon, approving the bankruptcy.

Snyder determined earlier this year that Detroit was in a financial emergency and without a plan to improve things. He made it the largest U.S. city to fall under state oversight when a state loan board hired Orr in March. His letter was attached to Orr’s bankruptcy filing.

“The citizens of Detroit need and deserve a clear road out of the cycle of ever-decreasing services,” Snyder wrote. “The city’s creditors, as well as its many dedicated public servants, deserve to know what promises the city can and will keep. The only way to do those things is to radically restructure the city and allow it to reinvent itself without the burden of impossible obligations.”

A turnaround specialist, Orr represented automaker Chrysler LLC during its successful restructuring. He issued a warning early on in his 18-month tenure in Detroit that bankruptcy was a road Detroit and its creditors did not want to tread.

He laid out his plans in June meetings with debt holders, in which his team warned there was a 50-50 chance of a bankruptcy filing. Some creditors were asked to take about 10 cents on the dollar of what the city owed them. Underfunded pension claims would have received less than the 10 cents on the dollar under that plan.

Orr’s team of financial experts put together said that proposal was Detroit’s one shot to permanently fix its fiscal problems.  The team said Detroit was defaulting on about $2.5 billion in unsecured debt to “conserve cash” for police, fire and other services.

“Despite Mr. Orr’s best efforts, he has been unable to reach a restructuring plan with the city’s creditors,” the governor wrote. “I therefore agree that the only feasible path to a stable and solid Detroit is to file for bankruptcy protection.”

Detroit’s budget deficit is believed to be more than $380 million.

1
Text Only
Top News
  • Lake Park considers millage rate increase

    Lake Park has tentatively adopted a millage rate which will result in a 29.64 percent increase in property taxes.

    July 28, 2014

  • Free Health Fair slated for August 9th

    A free health fair hosted by the 100 Black Men of Brooks-Grady-and-Thomas Counties, Inc. and sponsored by Archbold Hospital will take place on August 9th  from 8:00am until 12 noon.

    July 28, 2014

  • BtpsXVpIgAEXKB-.jpg Manhunt underway for drivers of stolen dump truck

    This morning, around 8:00 deputies from the Lowndes County Sheriff’s Office attempted to stop a dump truck traveling south on I-75.

    July 28, 2014 1 Photo

  • Kingston’s loss means less clout for Ga.

    For two decades, Rep. Jack Kingston was a congressman who routinely crushed his opponents on election night — winning a new term every other year with vote totals between 63 and 77 percent.

    July 28, 2014

  • IMG_3745.jpeg Gas leak on West Adair

    A gas leak has occured on West Adair Street, between Tombs and Oak Street. The leak began just after 11 a.m.

    July 28, 2014 1 Photo

  • salmonella 2 copy.jpg Trial nears for suspects in salmonella case

    Three people accused of scheming to manufacture and ship salmonella-tainted peanuts that killed nine people, sickened more than 700 and prompted one of the largest food recalls in history are set to go to trial this week in south Georgia.

    July 28, 2014 1 Photo

  • AP4507280123 copy.jpg Today in History for Monday, July 28, 2014
    Today is Monday, July 28, the 209th day of 2014. There are 156 days left in the year. 
     

    July 28, 2014 1 Photo

  • Commercial driver training program expanding

    Department of Driver Services (DDS) Commissioner Rob Mikell announced recently an expansion of the commercial driver training program administered by the Agency’s Regulatory Compliance Division. DDS will now offer a Commercial Driver License (CDL) Instructor Training Class for customers who have applied to be CDL instructors. The session will provide additional guidance as the applicants prepare for the final exam.

    July 28, 2014

  • Tentative deal reached on VA reform

    The chairmen of the House and Senate Veterans Affairs committees have reached a tentative agreement on a plan to fix a veterans’ health program scandalized by long patient wait times and falsified records covering up delays.

    July 27, 2014

  • Heat advisory for much of South Georgia

    A heat advisory is in place for much of South Georgia until 7 p.m.

    July 27, 2014

Top News
Poll

Do you agree with the millage rate increases?

Yes. We need to maintain services
No. Services should have been cut.
     View Results