Detroit’s Bankruptcy FilingJuly 25, 2013 – In The News
Michael Sweet, a noted authority of financial restructuring and bankruptcy, was a guest on CCTV on July 25, 2013 to discuss the ongoing Detroit bankruptcy filing.
Sweet noted that the city has been in despair for quite some time, saying, “It’s true this has been a long time coming. Detroit once the fifth largest city in the United States, has shrunk to under 700,000 residents. Once the wealthiest city per capita in the United States, it is now one of the poorest. Unemployment hovers near 20% and around 40% of the property is abandoned. Detroit is in terrible shape. They are facing problems a lot of other cities in the U.S. are, in that they made promises to pay their employees a certain pension in the future, which they now can’t pay.”
“There’s a lot at stake here. There’s never been a city the size of Detroit that has filed bankruptcy. In the last few days there were three state court lawsuits going on. A federal bankruptcy judge has ruled that those need to stop. When a federal bankruptcy is filed for, the federal judge stays all pending state court actions.”
Asked about the timetable for such a complicated matter, Sweet said, “This case is going to take a while. The cities of San Bernardino and Stockton have taken close to a year just to answer the original question that must be addressed, is the city eligible for bankruptcy.”
To view the complete interview click here.