Officials must seek Chapter 9 bankruptcy protection
Detroit civic organization, Citizens For Detroit’s Future (CFDF), headed by Detroit accountant Tom Barrow, delivered letters to Detroit’s elected leaders Jan. 8, calling on them to accept that the railroad is running towards the city and is controlled by conservative interests seeking to take the city’s coveted resources and assets.
“It is clear to city residents and our suburban neighbors — Detroiters all — that our city is being maligned daily and a conservative agenda being perpetrated against it to get what our late Mayor Young called the city’s ‘Crown Jewels,’” said Barrow
CFDF has long taken the public stance that an emergency financial manager (EFM) will be appointed no matter what the mayor or Council does. Therefore, the city must get off defense and go on offense to protect the city’s jewels.
“If Detroit’s mayor and Council continue to act like lambs, conservatives will continue to feast like lions,” Barrow said.
Contrary to the view by some on City Council, “it is naive to believe that if you take Draconian actions desperately trying to satisfy unrealistic milestones, extremists will somehow like you, be pleased and stop coming after at you,” Barrow said, “They will not because their agenda is rooted in a phony fiscal ruse which can never to be satisfied.”
CFDF’s Executive Board passed a resolution calling on Detroit’s City Council to immediately order the city’s law department, not Miller Canfield, to explore Detroit’s options under Title 11 of the US Bankruptcy Code at Chapter 9, specifically designed for municipalities.
Why a municipal bankruptcy reorganization? Because it is vastly preferable to a state-appointed EFM.
Barrow, who has been appointed by the federal courts as a trustee in multiple corporate bankruptcies in the past, understands the process. CFDF believes a conservative railroad is running on tracks designed by the Koch Brothers/Devos and Walton foundations. These conservative financiers’ plan of EFMs, right-to-work and voter suppression efforts is operating nationally and here in Michigan and goes like this:
- First, the EM will be appointed by the conservative state and will be someone we will recognize but who has quietly bought into the right-wing philosophy and wear a seeming Democrat’s suit.
- Second, he/she will render the elected mayor and Council impotent (thus the people silent).
- Third, he/she will sell or transfer city assets — the water department, Belle Isle, etc. — to private outside interests using the fiscal ruse ala Pontiac, Flint, Benton Harbor and Ecorse.
- Fourth, the EFM then will decimate the city’s unions and privatize multiple clear government functions.
- Fifth, its most impactful effect on our over 230-year old democracy, the EFM once in, no matter what anyone says, will last indefinitely and not be accountable to anyone in Detroit (just look at Detroit Public Schools) and become an indefinite overseer.
Conversely, under a self-imposed Chapter 9 Reorganization, the mayor and Council control everything. City assets remain under the ownership of the city and cannot be sold or transferred. The mayor and Council are given absolute power to set aside any contract they see fit.
While in Chapter 9 mayor and Council can set aside a union contract, a new mayor and Council will have the same power to re-instate any contract or whatever has been done during that short and interim period.
But most importantly, because Detroiters are in control and because the primary concern of the bankruptcy court will be the bond debt, with which the city is fine, it should immediately re-affirm all General Obligation and Special Revenue Bond debt to reassure the financial markets. The city can then, on its own:
- Set aside any state or local agreement, including having the ability to abrogate the Consent Agreement, and the Memorandum of Understanding.
- Dissolve the Financial Advisory Board and remove the state’s two $260,000-per-year imbedded operatives and all other state operatives whom we have been forced to hire.
In short, by judicious use of Chapter 9, the city can get the state out of its business and allow the current and future mayors and Councils to run the city subject only to the court and without state interference. The mayor and Council can decide when to emerge from the Bankruptcy Reorganization. Should the city need to borrow it need only ask the court, not Treasurer Andy Dillon or Gov. Rick Snyder.
CFDF has railed repeatedly that the city was not running out of cash and that the state’s claims were a ruse orchestrated by their imbedded operatives to generate a false flag media furor to make the city appear inept and incapable of managing its finances.
State operatives, with the complicity of some naive elected officials (note that none of our elected officials are trained in finance), falsely pushed city leaders to borrow money they did not need and then use the funds as a faux bludgeon to demand compliance with the privatization of city services and hiring of more state operatives — all while the city is sitting on half a billion dollars in its own water department, half of which is “unrestricted” and, as it’s properly structured, could have been used to borrow from ourselves with the interest paid to ourselves.
Around the end of November, the state’s bluff was called by a Council super-majority, 8-1, legitimately concerned with Miller Canfield’s obvious conflicts representing all sides — the state, the city and even itself (inserted into the Memorandum of Understanding with a requirement that the firm be hired “or else”). Mayor Dave Bing was forced to admit we would not be running out of cash and will last through Spring 2013, contradicting three years of Chicken Little shouts of “We’re running out of money!” That entire argument has now gone quietly away.
Yet, state operatives continue to set up faux milestones designed to get their EFM and make it appear rational and Detroiter’s own fault. This to provide justifications to disintegrate city unions, privatize essential government services and city’s departments and ruining city workers lives, further depressing the local economy.
Trains have been very good to Detroit in the past, but not this one. Our local history, from the metaphorical Underground Railroad that delivered escaped enslaved people to Canada via Detroit; to the great railways that delivered the Arsenal of Democracy in World War II; to the automobile makers receiving steel and supplies from across the nation, it served as a symbol of the city’s dominance. This train, conducted by a conservative Gov. Snyder, however, is steaming toward downtown Detroit to load up on city jewels and must be derailed with this very prudent and necessary step to solvency.
About The Author
Leave a Comment
You must be logged in to post a comment.