Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comKey Contacts
Back
Michigan Gov. Rick Snyder announced Thursday at a news conference in Detroit that he was committed to sending an emergency manager to oversee Detroit’s finances as the city struggles to avoid seeking bankruptcy law protection under Chapter 9 of the Bankruptcy Code.
Snyder will recommend the appointment of bankruptcy lawyer Kevyn Orr as the emergency manager, since the city’s finances remain in a dire state with no immediate hope of lawmakers coming to a solution. Orr is an experienced bankruptcy professional who worked on the team that handled the Chrysler bankruptcy restructuring. As the emergency manager, he will be tasked with assessing the failing city’s finances and developing a plan to repair them. If his analysis shows that no recourse can be taken to get its finances back on track, he will have the authority to implement a bankruptcy filing under Chapter 9 of the Bankruptcy Code, which is the provision specifically for municipalities.
Detroit has faced operating deficits for almost 10 years, has few cash assets, and faces climbing debt from state employee obligations, such as pensions and health insurance, Reuters reports. Fund mismanagement has also been cited as a core reason for the city’s failings. Some services, such as street lights and police protection, have been significantly scaled down, despite the city’s high crime rate. In addition, Detroit has an unemployment rate of 18.2 percent, well above the 7.7 percent national rate, the news source added.
Although city lawmakers have voiced their opposition to a state takeover of its finances, they have failed to make progress. Once in place, the emergency manager can renegotiate labor contracts, sell city assets, privatize services, and take over roles and responsibilities traditionally held by the town’s mayor and city council. If the manager urges Detroit to file for bankruptcy, it will become the largest municipal bankruptcy filing in U.S. history.
- Practices: Corporate Transactions & Business, Bankruptcy & Creditors' Rights, Bankruptcy Litigation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Why Secured Transactions Are Important
Secured transactions form the backbone of a wide range of business dealings, including business loans, mortgages, and inventory financing. Because the stakes are often high and relatively minor oversights can have drastic consequences, lenders and borrowers should thoroughly understand how to form an enforceable security agreement that protects their legal rights. What Is a Secured […]
Author: Dan Brecher
Don’t Cash a “Paid in Full” Check Without Understanding the Legal Implications
Cashing a check marked “paid in full” can be a risky endeavor, particularly if you don’t fully understanding the legal implications. If you are owed more than the amount of the check you accept and deposit, you may waive your right to collect the full disputed amount. That is why you should consider either rejecting […]
Author: Dan Brecher
Changes to Qualified Small Business Stock Will Benefit Startup Founders and Investors
The One Big Beautiful Bill Act of 2025 (OBBBA) significantly impacts federal taxes, credits, and deductions. A key change relating to Qualified Small Business Stock (QSBS) allows greater tax-free gains for investments in startups and other qualifying small businesses. Company founders and other investors should understand how the enhanced tax strategy works or risk missing […]
Author: Dan Brecher
Corporate Consolidation and Antitrust Issues in Mergers
Corporate consolidation involves two or more businesses merging to become a single larger entity. The result is often a stronger and more competitive company that can better navigate today’s competitive marketplace. What Is Corporate Consolidation? Corporate consolidation closely resembles a basic merger transaction. The primary difference is that a consolidation creates an entirely new business […]
Author: Dan Brecher
What is Business Law and Why Is it Important?
Business law plays a critical role in nearly every aspect of running a successful enterprise, from negotiating a commercial lease to drafting employee policies to fulfilling corporate disclosure obligations. Understanding what is business law and your legal obligations can help your business run smoothly and build productive relationships with clients, business partners, regulators, and others. […]
Author: Dan Brecher
Corporate Transactions: Best Practices for Successful Deals
Corporate transactions can have significant implications for a corporation and its stakeholders. For deals to be successful, companies must act strategically to maximize value and minimize risk. It is also important to fully understand the legal and financial ramifications of corporate transactions, both in the near and long term. Understanding Corporate Transactions The term “corporate […]
Author: Dan Brecher
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.