Saturday, 14 December 2019

Detroit Files for Bankruptcy

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  • After last year's Ford Fusion MKZ was released, now in the Detroit Motor Show 2013 exhibition, Ford is introducing a new crossover SUV from Lincoln, the Ford Lincoln MKC. telegraph.co.uk

    After last year's Ford Fusion MKZ was released, now in the Detroit Motor Show 2013 exhibition, Ford is introducing a new crossover SUV from Lincoln, the Ford Lincoln MKC. telegraph.co.uk

    TEMPO.CO, Detroit - Detroit Governor has filed for bankruptcy yesterday, July 18. The bankruptcy is said to be the biggest municipal bankruptcy in the history of the United States. If the demand was approved by a federal judge of the U.S. Bankruptcy Court in the Eastern District of Michigan, thousands of creditors would have to sit for negotiations with the city’s Emergency Manager Kevyn Orr to resolve an estimated US$18.5 billion debt.

    In an official letter accompanying the filing, Michigan Governor Rick Snyder claimed that he would grant Orr’s demand of filing for bankruptcy. "Detroit simply cannot raise enough revenue to meet its current obligations, and that is a situation that is only projected to get worse absent a bankruptcy filing," wrote Snyder.
    The shocking news has ignited chaos in the United State’s share market and financial market. The simultaneous selling by investors has led to a sharp decline in Detroit’s obligation value. At the same time, nobody has decided what to do with the thousands of town employees’ pension fund and health insurance.

    The Detroit governor action has attracted attention from President Barack Obama. "While leaders on the ground in Michigan and the city's creditors understand that they must find a solution to Detroit's serious financial challenge, we remain committed to continuing our strong partnership with Detroit," White House spokeswoman Amy Brundage assured.

    Orr has originally submitted a filing for bankruptcy to the creditors since June. However his proposal was blocked by disagreements from the majority of creditors, particularly two pension fund companies that represent the city’s employees. The two companies have now filed for a lawsuit to question the competence of Michigan Governor in appointing Orr to file for bankruptcy.

    A long time ago, Detroit was notably known as the biggest automotive producer in the US. During World War II, the automotive factories changed shift and produced weapons for war, like airplanes, tanks, and ammunition. At that time, Detroit was nicknamed 'the Arsenal of Democracy'.

    The city has now fallen. It is now notorious for its high criminality rate and has been left by many of its citizens. In 1950 the citizens of Detroit reached 1,8 million lives, while now only 700,000 people remain.

    General Motors, the only major US automaker headquartered in Detroit, claimed to be still proud of the city and will still call Detroit home. "This is a day that we and others hoped would not come. We believe, however, that today also can mark a clean start for the city."

    Meanwhile, Ed McNeil, chief negotiator for a coalition of 33 unions representing most of the service workers for the city of Detroit said the bankruptcy filing is merely a political move to grab power over the city. "This is not about fixing the city's finances. It's about the governor and his own agenda to take over the city of Detroit."

    L REUTERS | SITA PLANASARI AQUADINI