Bankruptcy for DPS

http://www.detroitnews.com/story/opi...ptcy/77528560/

The Detroit News reports the serious discussion of the possible filing for Chapter 9 bankruptcy by DPS. Two questions arise:
* I do not understand how bond markets operate. Some bond holders got less than they were owed in the bankruptcy of Detroit. If DPS goes into bankruptcy, some bond holders will likely be clipped. Will this have the consequence of raising the interest rates that many or all Michigan governmental entities pay when they go into the bond market? Is this a good reason for the state to pay off the indebtedness of DPS?
*Second, Judge Rhodes established the principle that the Michigan constitution does not guarantee pension payments to state and local government employees. I realize they may be further litigation about this point. Suppose DPS does not fully pay its obligations to the retirement fund that supports the pensions of teachers and school employees? Would that influence the pension payments of all retirees in that Michigan retirement system or only retirees who are owed pensions because they worked for DPS?
Thanks.

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Originally Posted by renf

http://www.detroitnews.com/story/opi...ptcy/77528560/

The Detroit News reports the serious discussion of the possible filing for Chapter 9 bankruptcy by DPS. Two questions arise:
* I do not understand how bond markets operate. Some bond holders got less than they were owed in the bankruptcy of Detroit. If DPS goes into bankruptcy, some bond holders will likely be clipped. Will this have the consequence of raising the interest rates that many or all Michigan governmental entities pay when they go into the bond market? Is this a good reason for the state to pay off the indebtedness of DPS?
*Second, Judge Rhodes established the principle that the Michigan constitution does not guarantee pension payments to state and local government employees. I realize they may be further litigation about this point. Suppose DPS does not fully pay its obligations to the retirement fund that supports the pensions of teachers and school employees? Would that influence the pension payments of all retirees in that Michigan retirement system or only retirees who are owed pensions because they worked for DPS?
Thanks.

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As you debate these issues, always remember that no action occurs in a vacuum. For example, if you pay of the indebtedness of DPS for whatever reason, you must then expect that other school districts will also decide that pension fund contributions are not quite as important -- since someone else will pay them in the end. This would likely create a larger crisis.

again? It's been under state management for however many years now. What does a formal bankruptcy solve that a neo-bankruptcy with state-appointed financial managers didn't solve yet? What is the plan going forward to change academics [[college prep vs. vocational, etc.), teaching methods, pay structure, address truantism, disenrollment, classroom crowdedness, school closing, and the various other ancillary issues? This has to be addressed once and for all.

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Originally Posted by Hypestyles

again? It's been under state management for however many years now. What does a formal bankruptcy solve that a neo-bankruptcy with state-appointed financial managers didn't solve yet? What is the plan going forward to change academics [[college prep vs. vocational, etc.), teaching methods, pay structure, address truantism, disenrollment, classroom crowdedness, school closing, and the various other ancillary issues? This has to be addressed once and for all.

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Emergency management has no impact on the legacy costs. DPS still has to pay all the old loans, pensions, and other debt. I don't know what the current percentage is, but just like Detroit pre-bankruptcy, much of the income goes directly to debt payment with whatever is left for operations.

My hope if that bankruptcy will, in addition to fixing the finances, cause a lot of the rats to jump ship. Then the battle will be finding qualified people to replace them.

Detroit Public Schools is bankrupt. It's Snyder [[Caligula), the geek. That is doing the institutional hokey pokey to improve its schools, teachers and administrators. And its not working.