Detroit defaults on some debt to avoid bankruptcy filing

[Trajan]

well, bond holders will get approx. 10 cents on the dollar this time round, stay tuned, they'll be more.




DETROIT | Fri Jun 14, 2013 3:45pm EDT

(Reuters) - Detroit defaulted on some debt on Friday and proposed most creditors receive just pennies on the dollar owed by the "insolvent" city in order to avoid the largest municipal bankruptcy filing in U.S. history.

In a forceful opening salvo of negotiations with holders of as much as $18.5 billion of debt, Detroit Emergency Manager Kevyn Orr announced a moratorium on some principal and interest payments, including one due on Friday.

snip-

He said the city would skip a $34 million payment due on Friday on $1.43 billion of pension certificates of participation, to allow the city to conserve cash needed to provide services to residents.

snip-

Orr said the city was "insolvent," unable to pay its debts, and needed shared sacrifices from everyone including debt holders, to have any hope of a revival.

Insolvency and inability to pay debts are two tests a government must meet for a judge to accept a Chapter 9 municipal bankruptcy.

"It looks and feels like a pre-packaged bankruptcy plan," said Richard Ciccarone, managing director at McDonnell Investment Management, in reaction to the proposal.

more at-

Detroit defaults on some debt to avoid bankruptcy filing | Reuters

 

[Dugdale_Jukes]

This is a back door bankruptcy.

Because the city knows that if it files bankruptcy there will be costly legal battle involving government worker unions on the same side as doormat services, gasoline sales contractors and so on, opposing the city filing bankruptcy.

By defaulting the city is hoping a judge forces the city into bankruptcy, transferring the costs of the process to the federal government which also has the effect of increasing costs of fighting the declaration while increasing the city's prospects the declaration will stick.

This is the smartest move Detroit has made since the 1980s.

 

[Rozman]

Can't we just shut that place down and call it a day....
Let the private sector turn the place into a penal colony and build new prisons
and have all the convicts moved there.Wall it all off.Build a moat....and that be that.

 

[KissMy]

I have bond brokers calling me every week trying to sell me government bonds. They tell me bonds are rocking & gold is over. I just can't bring myself to make that trade.

 

[ScienceRocks]

This is what happens when
1. Your population is unproductive
2. You can't budget worth the damn

Why does this city allow these two to sink it is quite interesting.

 

[daveman]

Liberal economics at work, ladies and gentlemen.

 

[Trajan]

I have bond brokers calling me every week trying to sell me government bonds. They tell me bonds are rocking & gold is over. I just can't bring myself to make that trade.

I got out of gold back in late nov.....when a schmuck like me makes a 60% gain, you know shit is messed up.

Bonds? got out of akp which treated me great for 3 years.......I am on the sidelines waiting for the dip...and even then, I am not sure if I have the heart for this again.

 

[KissMy]

I have bond brokers calling me every week trying to sell me government bonds. They tell me bonds are rocking & gold is over. I just can't bring myself to make that trade.

I got out of gold back in late nov.....when a schmuck like me makes a 60% gain, you know shit is messed up.

Bonds? got out of akp which treated me great for 3 years.......I am on the sidelines waiting for the dip...and even then, I am not sure if I have the heart for this again.

I sold over half my gold about a year ago & bought some stocks. But I am having a hard time letting go of the rest. I got into gold at $730 so I am still way up on the remaining holdings. I do not believe the fed will taper printing money because governments can't afford their debts if they have to pay a real market rate. Many cities will default if that happens.

 

[rightwinger]

Liberal economics at work, ladies and gentlemen.

American capitalism at its finest

Get everything you can get out of a city......then abandon it

 

[RoadVirus]

Detroit is like the Favelas of Rio de Janeiro

 

[RoadVirus]

Liberal economics at work, ladies and gentlemen.

American capitalism at its finest

Get everything you can get out of a city......then abandon it

Boogers on that. Detroit was doing great until 2 things happened:
1. The American auto industry became dictated by the Unions
2. The citizenry of Detroit electing crooked Democrats to the city council/mayor's office for decades

 

[ScienceRocks]

Liberal economics at work, ladies and gentlemen.

American capitalism at its finest

Get everything you can get out of a city......then abandon it

Why pour money down the crapper for a people that are unproductive? The government they elected is bad because the population is bad.

How do we charge this?

 

[daveman]

Liberal economics at work, ladies and gentlemen.

American capitalism at its finest

Get everything you can get out of a city......then abandon it

Still just as stupid as ever, aren't you?

Dumbass.

 

[Jackson]

well, bond holders will get approx. 10 cents on the dollar this time round, stay tuned, they'll be more.




DETROIT | Fri Jun 14, 2013 3:45pm EDT

(Reuters) - Detroit defaulted on some debt on Friday and proposed most creditors receive just pennies on the dollar owed by the "insolvent" city in order to avoid the largest municipal bankruptcy filing in U.S. history.

In a forceful opening salvo of negotiations with holders of as much as $18.5 billion of debt, Detroit Emergency Manager Kevyn Orr announced a moratorium on some principal and interest payments, including one due on Friday.

snip-

He said the city would skip a $34 million payment due on Friday on $1.43 billion of pension certificates of participation, to allow the city to conserve cash needed to provide services to residents.

snip-

Orr said the city was "insolvent," unable to pay its debts, and needed shared sacrifices from everyone including debt holders, to have any hope of a revival.

Insolvency and inability to pay debts are two tests a government must meet for a judge to accept a Chapter 9 municipal bankruptcy.

"It looks and feels like a pre-packaged bankruptcy plan," said Richard Ciccarone, managing director at McDonnell Investment Management, in reaction to the proposal.

more at-

Detroit defaults on some debt to avoid bankruptcy filing | Reuters

Leaders of some of Detroit's 48 public sector unions were upset by Orr's proposals, which included spinning off water and sewer services into an independent authority, as well as making the changes to pensions and health care coverage.

"When you're backed into a corner, the only thing you can do is fight and the only way we can fight is to strike," said Mike Mulholland, secretary and treasurer of AFSCME Local 207, the union that represents water and sewer workers.

Yep, that'll work.

 

[Trajan]

Liberal economics at work, ladies and gentlemen.

American capitalism at its finest

Get everything you can get out of a city......then abandon it

right, hey Bro, news for you- that Alinsky shit doesn't work when you've had the power for 50 years......buy a clue RW.

 

[Trajan]

well, bond holders will get approx. 10 cents on the dollar this time round, stay tuned, they'll be more.




DETROIT | Fri Jun 14, 2013 3:45pm EDT

(Reuters) - Detroit defaulted on some debt on Friday and proposed most creditors receive just pennies on the dollar owed by the "insolvent" city in order to avoid the largest municipal bankruptcy filing in U.S. history.

In a forceful opening salvo of negotiations with holders of as much as $18.5 billion of debt, Detroit Emergency Manager Kevyn Orr announced a moratorium on some principal and interest payments, including one due on Friday.

snip-

He said the city would skip a $34 million payment due on Friday on $1.43 billion of pension certificates of participation, to allow the city to conserve cash needed to provide services to residents.

snip-

Orr said the city was "insolvent," unable to pay its debts, and needed shared sacrifices from everyone including debt holders, to have any hope of a revival.

Insolvency and inability to pay debts are two tests a government must meet for a judge to accept a Chapter 9 municipal bankruptcy.

"It looks and feels like a pre-packaged bankruptcy plan," said Richard Ciccarone, managing director at McDonnell Investment Management, in reaction to the proposal.

more at-

Detroit defaults on some debt to avoid bankruptcy filing | Reuters

Leaders of some of Detroit's 48 public sector unions were upset by Orr's proposals, which included spinning off water and sewer services into an independent authority, as well as making the changes to pensions and health care coverage.

"When you're backed into a corner, the only thing you can do is fight and the only way we can fight is to strike," said Mike Mulholland, secretary and treasurer of AFSCME Local 207, the union that represents water and sewer workers.

Yep, that'll work.

yup thats capitalism for you, go on strike....


...right RW?

 

[Trajan]

I have bond brokers calling me every week trying to sell me government bonds. They tell me bonds are rocking & gold is over. I just can't bring myself to make that trade.

I got out of gold back in late nov.....when a schmuck like me makes a 60% gain, you know shit is messed up.

Bonds? got out of akp which treated me great for 3 years.......I am on the sidelines waiting for the dip...and even then, I am not sure if I have the heart for this again.

I sold over half my gold about a year ago & bought some stocks. But I am having a hard time letting go of the rest. I got into gold at $730 so I am still way up on the remaining holdings. I do not believe the fed will taper printing money because governments can't afford their debts if they have to pay a real market rate. Many cities will default if that happens.

I got in at $998.

and I agree, no way no how, Bernbank is riding it like a tired whore till the very end....and there is no end game strategy here.

 

[JoeBlam]

As a native Detroiter, I'm laughing my ass off reading this thread. Tell ya what...let the black panthers burn down 2,200 buildings in your city, watch the white residents flee to the suburbs, have japan take over the major industry you depended on, (you asked for it you got it....throttle-stuck runaways....TOYota), then hire crooks to handle the money for the next 40 years....and then get back to me about "what happened to...." your city. Will Detroit survive and return to health? Of course....plenty of money in the burbs, Greektown is flourishing, new sports stadiums, Red Wings hockey, GM back in the black....give em time. Until then, we appreciate the jokes knowing the jokes on you because Detroit was just the first of the coming tsunami of city bankruptcies.

[ame=http://www.youtube.com/watch?feature=player_embedded&v=Ny4a-oxOndo]Take Him To Detroit - YouTube[/ame]

 

[JoeBlam]

The Manoogian is the Detroit mayor's residence....during Kwame's years it was the site of parties with strippers getting their asses kicked, cocaine deals, strong-arming contractors for kickbacks, using city funds for everything but what they were intended.....Kwame just got out of state prison, looking at another 20 years in a federal pen.


[ame=http://www.youtube.com/watch?v=u0Hx36d9k-A]Animated-Party At The Manoogian-Mayor Kwame Kilpatrick - YouTube[/ame]