Oh, Snap. Orr says, "How about I give you dimes for dollars, and we can call it even?

[313WX]

BK court CAN NOT force the city to do things they don't want to do. DIA art and other assets are in more danger under an EM deal and/or an EM run bankruptcy than one run by the city. The reason is that under Chapter 9 the stakeholders must agree to conditions.

The city would have the option to "say no" to liquidation. Creditors also have the option to "say no," however if you get one group of creditors to "say yes" then the others can be forced to follow suit.

IMO, a bankruptcy run by the EM is the most dangerous though because they have little to no interest in looking out for the long term prospects of the city. They are not accountable to the people or re-election so they are more prone to "give away the farm" in a Chapter 9 proceeding.

Also, I am unsure what would happen with pension funds and union obligations. Those unions would be among the people who would have the option to be represented in court. However, an EM could tear up the contract and effectively eliminate debts and such without the approval of the federal judge. [[Pensions notwithstanding, as they are run separately and previous precedent shows that the EM cannot touch or reform pension structures). So that's another reason that the EM is more dangerous in a Chapter 9 situation.

TL; DR: It's not the judge or the court to worry about with BK, it's the EM.

All of those points I agree with, especially the part about the EM being the receiver in the BK proceeding. Orr as the receiver could opt to put the DIA and DWSD for sale in the negotiations.

My hope is that if things go right [[it's more so a timing issue), by the time Detroit files for bankruptcy, PA 436 would be declared unconstitutional by the federal court.

[Toka313]

My hope is that if things go right [[it's more so a timing issue), by the time Detroit files for bankruptcy, PA 436 would be declared unconstitutional by the federal court.

And it would have to be the federal court, with the Michigan one packed with Republicans right now. Good point. I don't know about the chances that the NAACP and NAN have in Federal court though. Seems that they're best argument is that cities like Hazel Park had the same financial rating as Pontiac but didn't get an EM. But that's a tangent possibly worthy of another thread.

[mwilbert]

BK court CAN NOT force the city to do things they don't want to do.

This is true, but I don't think it means what you think it means. Your employer can't force you to show up at work if you don't want to, but if you don't, he can fire you.

The bankruptcy court cannot force an asset sale, but if the judge doesn't think you are presenting an acceptable plan he can throw you out of bankruptcy, at which point you and your assets are no longer protected from the creditors you may have defaulted on, and some other court may well let them start grabbing assets. So if the bankruptcy judge believes that it would be appropriate to sell some of your assets as part of an equitable settlement, your alternatives may not include holding on to those assets.

The problem in Detroit is that while a judge probably isn't going to think it is reasonable to sell Belle Isle, I don't have any particular idea whether one might think it was reasonable to sell some paintings. Certainly I hope not. It is also possible that the Legislature could shield the assets from actions in state courts.