Following the onset of the 2008 crisis, Detroit faced tremendous struggles.
he city was able to hang on economically for some time before finally filing for bankruptcy in 2013. Detroit’s bankruptcy is widely expected to be the largest municipal case in U.S. history, but where does the Detroit case go from here?
Bankruptcy law is complicated, so completing a bankruptcy case isn’t as simple as filing the bankruptcy petition. Most significantly, according to USA Today, the city will need to get its creditors behind Detroit’s proposed bankruptcy plan of reorganization. While the hope is to get creditors to agree to the plan, however, that isn’t always the case.
Detroit’s plan could take effect without the approval of all creditors, however, if the city’s bankruptcy attorneys ask Bankruptcy Judge Steven Rhodes to approve it under a “cramdown” scenario. While a complicated procedure, the “cramdown” rules allow a bankruptcy judge to approve a plan of reorganization over the objections of creditors if it is essentially fair, equitable, and nondiscriminatory.
Another thing Detroit needs to be worried about is the possibility of creditor appeals. Several creditors, and including the city’s two pension funds, have filed appeals from adverse rulings by Judge Rhodes. Depending upon how these turn out, they could impact adversely on Detroit’s ability to confirm a plan and to emerge from bankruptcy.
The city’s water department will spur the next big discussion controversy in the bankruptcy case. According to the Detroit News, the meditation on the fate of this department has is to continue in the first week of 2014. There is currently a controversial plan to spin off control of the department to help aid in the restructuring of Detroit’s $18 billion debt. In the near future, Detroit should find out whether the department will be leased, sold or transferred.
This bankruptcy case is far from over, and it will be interesting to see where it goes from here.
The SEC’s Latest Guidance on Applying Federal Securities Laws to Tokenized Securities
On January 28, 2026, staff of the U.S. Securities and Exchange Commission’s Divisions of Corporation Finance, Investment Management, and Trading and Markets issued a joint statement clarifying how existing federal securities laws apply to tokenized securities. The SEC’s “Statement on Tokenized Securities” does not establish new law, but it does provide greater clarity on the […]
Common Legal Mistakes NYC and New Jersey Business Owners Make
Operating a business in the New Jersey and New York City metropolitan region offers incredible opportunities, but it also requires navigating a dense and highly regulated legal environment. From entity formation to regulatory compliance, seemingly minor legal oversights can expose business owners to significant risk. In our work with businesses throughout the region, our attorneys […]
High-profile founder litigation is more than just a media spectacle. For startup founders, these cases underscore the legal and structural risks that can arise when rapid growth outpaces formal oversight. While launching a new company can be both an exciting and deeply rewarding endeavor, founders must be mindful that it also comes with significant risks. […]
Corporate Governance Reviews: A Practical Guide for New Jersey Companies
Every New Jersey company should periodically evaluate its governance framework. Strong corporate governance protects directors and officers, builds investor confidence, reduces litigation exposure, and positions a company for sustainable growth. The first quarter of the year is a great time to evaluate your corporate governance practices and perform any routine maintenance needed to keep that […]
What to Do After Being Served with a Lawsuit: Steps to Protect Your Legal Rights
Being served with a lawsuit is one of the most stressful legal events a business or individual can face. Whether the claim involves a contract dispute, an employment matter, an intellectual property issue, or another legal challenge, the actions you take in the first few days can significantly shape the outcome of your case. Acting […]
Will 2026 Be a Banner Year for SPACs? Understanding the Risks and Opportunities
Special Purpose Acquisition Companies (SPACs) continue to gain momentum as we move through 2026. After enduring a significant contraction following the 2021 boom and the regulatory scrutiny that followed, SPAC activity rebounded sharply in 2025 and now carries forward into 2026 with real momentum. The SPAC resurgence reflects broader improvements in both market conditions and the […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
