Contingency plans being developed for the bankruptcy of Detroit

A number of municipalities have experienced fiscal troubles in recent years but the issues in Detroit may be pushing it to bankruptcy:

The working concept, still evolving, assumes that the state’s financial review would find severe financial distress in Detroit, that Mayor Dave Bing and City Council would be unable to push through overdue restructuring, and that the process would culminate in appointment of an emergency financial manager under Public Act 72.

The case would be filed under Chapter 9 of the federal bankruptcy code, according to two ranking sources familiar with the situation, following efforts to reach prenegotiated settlements with as many key creditors — unions, vendors and pension funds among them — as possible before any filing…

The evolving bankruptcy scenario is a clear signal that Gov. Rick Snyder and Treasurer Andy Dillon have lost confidence in the ability of the mayor, his management team and council to honor their commitments under the eight-month-old consent agreement with the state, or to make any meaningful progress on restructuring.

Over recent years, a number of suggestions have been thrown out regarding Detroit including the city should be contracted and it is an ideal site for urban farming and reclaiming the land from unused and/or vacant buildings.

I wish the article spent more time discussing what would then happen to Detroit moving forward. How will this affect city services and residents? After a managed bankruptcy, where does this leave the city? Realistically, what plans could be pursued that would put Detroit on a better financial footing and with some hope for the future?

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