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I was surprised to learn about this new loan offer to Detroit in an out-of-town
newspaper rather than in the Freep or News? Will Bankruptcy judge Rhodes
permit the city to take on substantial new debt obligations at this time?
http://dealbook.nytimes.com/2014/08/...ttom-well&_r=0
That's because this sounds more like a Op-Ed piece from someone who seeks to cash in on Detroit than something newsworthy.
I like what one of the comments about this article said....
"This offer feels more like a fancy loan shark coming in to save and then destroy the Detroit Institute of Arts."
This is not new.
About a year ago there was a guy robo-posting here under the name of “Coesession” or something like that. Folks here got real tired of him and his propaganda very fast. He left here and moved on to spout his company’s plan on the FREEP and DETNEWS comments section.
I think most here believed him to be a huckster and fraud – only in it for the big commission he wanted. So could Art Capital be “Coesession”?
And the FREEP did have a long article about using DIA art as collateral for a loan 10 months ago. In case you missed it:
http://www.freep.com/article/2013101...te-of-Arts-DIA
I don't see why 'substantial debt obligations' are are a problem -- so long as they are part of well-funded reorganization. Isn't the idea of municipal bankruptcy to reorganize debt, and only reduce to the minimum degree.Quote:
Originally Posted by renf
Debit if funded by future revenues seems pretty normal to me. Not to say that I think this makes any sense at all. Just talking about the taking on debt.
Because it sounds like a shitty pawn deal that any person with even a single ounce of financial sense would turn down first glance? Would you take out a loan against your car when you already have a professionally constructed way of handling the obligations you're having difficulty meeting?Quote:
Originally Posted by renf
Because the purpose of a bankruptcy is to ease the debt burden, not prolong it? This plan doesn't provide any "future revenues", just debt.Quote:
Originally Posted by Wesley Mouch
It did make the local news:
http://www.detroitnews.com/article/2...art-collateral
My take:
[[1) I think it should be considered.
[[2) Remember, if we borrow, then we also lose. The $800MM from the grand bargain goes away.
[[3) Remember, if we borrow, then we split the money. That money won't go to pensioners, it will be split among all sides. Pensioners may end up getting more, but they also may end up getting less.
[[4) Using the art as collateral may come with real problems...one of them being clear title. The donors who gave that art may not allow it to be sold, which eliminated the possibility of them being used as collateral.
[[5) Using art as collateral also raises questions about the precedent you are setting. [[Though cutting pensions is also a precedent, so, there's definitely an argument that will need to happen.)
My opinion? $4BB in exit financing sounds alluring if that were going to be used to improve services, hire more cops, re-train employees, modernize systems, eliminate blight, etc. If most of that money is just paying off old debt?
Forget it.
Sigh.
You can't pledge what you don't own. The part of the "grand bargain" that this author is either unaware of or ignores is that there is a substantial legal argument that some if not most of the art was either loaned or transferred with restrictions or conditions.
The art can't be pledged for the same reason it can't be sold--ownership is unclear.
Oh, and by the way, Chapter 9 is not like Chapter 11--third parties can't come from the outside and make offers for assets and ask the judge to approve them over the parties' objections.
But I suppose that would make a boring story, wouldn't it?
Synergy is still not giving in the Grand Bargaining Deal. They expect Detroit City Government to pay its bills in full or else!
OK, so if we took this "deal", we could borrow $4 Billion to pay off our creditors now. Give a little more money to the banks and the insurance companies, Really screw the pensioners, Because they will get a tiny amount of this payout because it's split equally with the creditors. At the proposed 6% interest rate we would have to pay out $7.2 billion over 30 years to pay off the new note. How does trading $4b we already owe with the $7.2B we would owe in this deal help the city?
How about we stick to the grand bargain, allowing us to better protect the pensioners and just shaft the banks and insurance companies.
http://www.detroitnews.com/article/2...art-collateral
I sort of read the last sentence of that quote with the voice of some villain with a monocle and a fur lined coat.Quote:
On Wednesday, FGIC released a statement calling Art Capital’s latest offer “a game changer” and “a win for all sides.”
“It represents a real and viable solution that could enhance recoveries for all creditors by billions and catalyze the revitalization of the city — while also keeping the DIA collection in Detroit,” FGIC said in a statement. “It simply represents an extremely attractive option for all stakeholders and a win for all sides. Choosing to proceed with the inferior ‘grand bargain’ would be opting to disregard common sense at the expense of all parties.”
Wowie! Zoinks! These kindly folks are offering to loan money to someone collateralized by assets that someone does not own?! Shoot, sign me up for some of that! I'd like to borrow $5,000 and put up Lowell's car for collateral, then I'll take another $250,000 and put up the City-County building. I might need more money later, then you can take Lake Michigan for collateral!
That was not my understanding. Certainly the efforts to provide public safety by Orr is an effort to protect future tax revenues, no? But this is a sideshow to the discussion. Nothing to be seen here.Quote:
Originally Posted by mwilbert
Henry Ford built Detroit.
The City of Detroit Government broke Detroit
Michael Ford of the AATA is coming soon in 2016 to "Fix" Detroit
That is why he is getting $200,000 per year.
Uh-oh I see another demand for a "televised debate" in our future....Quote:
Originally Posted by That Great Guy
Great more of the same.
Instead of digging yourself out of a hole, you go and dig it deeper.
Sounds like a giant Sub-prime loan.
Billion dollar deals and the sharks will not only swim but start a frenzy. Time to keep the eye on the ball. Fast is what Detroit needs not years down the road after all the lawyers got fat and the commissions are huge.
Mr John Hertel refused public debates because he knew the truth about the August 5, 2014 vote.Quote:
Originally Posted by ABetterDetroit
If I can get support for my WebSite and get Lowell to post, I will get both Mr. Ford and Mr. Hertel on TV to fill up the buses with fare box paying customers. I'm very sure they are both SMART enough to get this done.
But why? When it is so easy to raise $4 Million and $27 Million per year in both AA and the Motor City from the property owners.
They both could not dazzle the public with Brilliance of actually getting lots of fare box money. So, they baffled the voting public with lots of bullshit instead. And both won.