Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Emergency Manager Orr: Detroit Nearing Municipal Bankruptcy
Author: Joel R. Glucksman
Date: May 30, 2013
Key Contacts
Back
The once-bustling city of Detroit may be weeks from seeking municipal bankruptcy protection, according to the findings of a report from appointed emergency manager Kevin Orr.
Orr’s analysis reveals that the city is short of cash and faces the very real risk of running out of funds to maintain city services, pay employees, and fund retirement pensions and benefits. Detroit is currently facing $15 billion in long-term debt, as well as a growing deficit. Under-funded pensions are another factor making it difficult for city officials and the creditors to reach an accord. According to sources, reduced debt payments are the only available option for keeping the city afloat and avoiding the beginning of Chapter 9 municipal proceedings under bankruptcy law.
The emergency manager said he will know in roughly six weeks if creditors, unions, and other parties can reach an agreement that will allow for this debt reduction and sustain Detroit through the worst cash flow crisis that the city has ever faced.
In an interview with reporters, Orr was careful not to criticize city officials, but did say that Detroit’s current financial issues are the result of decades of mismanagement and neglect.
“What stands out to me is 40 years of dropping demographics, of reducing revenues – you don’t get the magnitude of neighborhood blight we have overnight – of no one having a plan or solution for that, of inviting, quite frankly, some class of residents to leave,” Orr said, according to the Detroit Free Press. “And they did. They literally went across 8 Mile and started building buildings in Southfield. Without a vision for what you want your city to be three, five, 10, 20, 30 years out, the totality of those circumstances drove us here.”
He noted that while the city’s financial picture was worse than he expected, decisions about bankruptcy will not be made for another 30 to 60 days.
- Practices: Bankruptcy & Creditors' Rights, Corporate Transactions & Business
- 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
BESS Project Agreements: Allocating Risk Among Developers, EPC Contractors, and Equipment Suppliers
Developers, engineering, procurement, and construction (EPC) contractors, and equipment suppliers each play a critical role in completing a BESS project. However, when equipment costs rise, deliveries are delayed, or regulations change, determining who bears the financial consequences can become contentious. Well-drafted project agreements are essential to sound risk allocation. Key Takeaways This article is Part […]
Author: Nicholas Wall
IP Infringement: What Steps Can You Take If You're Affected?
IP infringement occurs when someone uses your intellectual property without your permission or beyond the scope of the permission you granted. Common examples of IP infringement include copying a product’s patented features or using a trademarked logo in a way that is likely to confuse consumers about the source or affiliation of goods or services. […]
Author: Michael Mietlicki
Public Allegations, Unfinished Investigation: What New Jersey Businesses Should Do Next
When facing public allegations of wrongdoing, companies should not let the speed of the public conversation dictate the speed of an investigation. An investigation designed to confirm a preferred narrative rather than establish the facts can create serious problems later, particularly if litigation, regulatory scrutiny, or employment claims follow. Key Takeaways When public allegations surface […]
Author: Sean M. Pena
BESS Interconnection: Managing Grid, Cost, and Schedule Risk
For battery energy storage system (BESS) developers, securing equipment and site control is only part of the development equation. A project must also connect to the electric grid, and increasingly, BESS interconnection is one of the biggest sources of schedule, cost, and contractual risk. Key Takeaways This article is Part 3 of our Battery Storage […]
Author: Nicholas Wall
Navigating Director and Officer Liability in Times of Financial Distress
Director and officer liability increases sharply when a company is in financial distress. Decisions that would draw little attention in a healthy business can later be challenged by creditors, shareholders, bankruptcy trustees, and regulators as breaches of fiduciary duty, fraudulent transfers, or oversight failures. Understanding where that exposure comes from, and how to manage it, […]
Author: Michael Mietlicki
Before You Buy: Managing Real Estate and Permitting Risk for BESS Projects in New York and New Jersey
For developers pursuing battery energy storage system (BESS) projects, finding the right property is only the beginning. BESS site selection is as much a legal and transactional exercise as a real estate decision, with risk analysis central to the project’s ultimate success. Key Takeaways The core questions for BESS site selection in New York and […]
Author: Nicholas Wall
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.