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    Who are the NERD fund donors Mr Snyder?

    Raise the curtain.

    Well, this is...interesting.

    By KG One, Section News
    Posted on Tue Dec 03, 2013 at 10:25:59 PM EST
    Tags: Detroit, Bankruptcy, Gov. Rick Snyder, EM Kevyn Orr, P.A. 4 of 2011, P.A. 72 of 1990, P.A. 436 of 2012, Judge Steven Rhodes, Usual suspects:, Jerome Cavanagh, Roman Gribs, Coleman Young, Kwame Kilpatrick, Monica Conyers, Kwame Kenyatta, JoAnn Watson, Charles Pugh, Cloward & Piven Strategy full-scale field test, Not helping to pay Detroit's debts:, Graham Beal, Annemarie Erickson, Eugene Gargaro Jr, Cynthia Pasky, Saul Green (all tags)

    It really didn't surprise anyone watching the first-hand effects of democrat's "leadership" skills in action (a.k.a. Full-scale Cloward & Piven field test) in what was once known as Detroit.

    In a very anticipated decision in Federal Court downtown this morning, Judge Steven Rhodes ruled that Detroit CAN file for Chapter 9 Bankruptcy.

    However, things aren't as cut and dried as they seem on the surface.

    And just what might those things be?

    {Story continues after the fold}

    Let's start from the beginning.

    In order for the decision to file for bankruptcy to proceed, four criteria must be met.

    -    First, Detroit must prove that it's broke and cannot pay its bills.

    -    Second, Detroit must show that is has bargained with its creditors in good faith.

    -    Third, Detroit must properly file for bankruptcy.

    -    And fourth, Detroit must show that it wants to pay its bills.

    Three out of those four are pretty cut and dried.

    Detroit is almost $20-billion in the hole. Those with the means are leaving Detroit en masse making the $20-billion hole that much harder to dig out of.

    P.A. 436 takes the decision making out of the hands of the children who have consistently pointed fingers of blame, stomped their feet and generally stalled making any real hard decisions and instead placed it in the hands of adults who have some experience in solving financial problems.

    Those same adults placed in the role of making the decisions for the children realize that for Detroit to survive, it needs to start paying its bills and live within a budget.

    Great, so that's three out of four. But what about that bargaining in "good faith" criteria?

    Here's where things get a little...complicated.

    In a 140-page decisions that Judge Rhodes began reading at 10:00am this morning (a copy of which will NOT be available until sometime Wednesday afternoon), he made a few eye-opening decisions.

    He basically agreed with the three out of the four items above.

    Detroit is in over its eyeballs in red ink and therefore insolvent when it filed for bankruptcy.

    P.A. 436 was not unconstitutional, so Kevyn Orr's appointment along with his decisions made in that capacity still stand.

    But that "good faith" thing...not so much agreement about that from Judge Rhodes.

    Given the sheer number of people Detroit owes money to, around 100,000, Judge Rhodes claimed that it was "impossible" for Detroit to adequately negotiate with that number of people in such a short period of time.

    That one sticking point notwithstanding, Judge Rhodes did rule that Detroit can proceed with its bankruptcy filing.

    Even though he had stated within his ruling that pensioners claim of protection from cuts are more or less null and void due to federal law, he left them a pretty big back door to argue that they are due something in the process.

    Providing that the retirees are somehow able to get a favorable ruling in the future from this, actually getting paid might be a little bit difficult.

    During his some two-hour decision, Judge Rhodes made an unusual comment regarding the sale of Detroit assets to pay its debts (read: DIA).

    "When the expenses of an enterprise exceed its revenue, a one-time infusion of cash, whether from an asset sale or borrowing, only delays inevitable financial failure unless the enterprise reduces expenses or enhances income."

    I'm not sure where his Alice in Wonderland-logic came from.

    I'm not aware of any other bankruptcy cases where people are able to keep their property by claiming that it will adversely affect their ability to earn money.

    I am aware of a number of companies that went bankrupt and eventually had an auctioneer come in and sell off any assets they had to pay off their debts.

    To make matters even more curious with this story, Kevyn Orr made a statement to The News a few hours after the ruling stating that, "The combined value of the city's most valuable art is less than $2 billion and cannot solve the city's pension problems."

    He also went on in the same article stating, "I don't want to take it off the table."

    Kevyn Orr is a reasonably intelligent man.

    Granted he screws up from time to time by doing things like not paying his taxes.

    But at the end of the day, I'd still classify him as a reasonably intelligent man.

    I also recognize what he's doing from playing poker.

    "The combined value of the city's most valuable art..."???

    Who said anything about selling only part of the collection.

    The initial estimates pegged the ENTIRE collection between $10 to $20-billion.

    More than enough to pay retirees and a few other outstanding debts.

    All in all, this all should make for an interesting read in the coming weeks and months.

    Stay tuned!

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    It wouldn't surprise me (none / 0) (#1)
    by JGillman on Tue Dec 03, 2013 at 11:22:55 PM EST
    if there wasn't an effort at full accounting, and those who make a claim will literally be assigned the same percentage as everyone else, or at least in particular debt classes.

    How does 5 cents on the dollar sound?

    None of the lenders should be surprised.

    Detroit is entering the final stage: (5.00 / 1) (#2)
    by Bruce on Wed Dec 04, 2013 at 12:18:36 PM EST

    What a difference 9 years makes.  Actually, no difference.

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