Detroit's on the Canvas, the Ref's Counting,
but "Saved" by the Bell??_for Now

"I like the challenge it [Detroit financial restructuring] presents," bankruptcy lawyer Kevyn Orr, a partner in the Cleveland firm Jones Day, told a March 14 press conference. Orr is resigning from his firm to avoid any potential conflicts of interest in dealing with negotiations in Detroit. Among Detroit's financial challenges is a $327 million budget deficit, and more than $14 billion in long-term liabilities, including underfunded pensions.
Photo: Jones Day law firm

LASN has followed the economic travails of Detroit over the years. The imperiled city is now approaching the final act. On March 14, Michigan Gov. Rick Snyder granted Washington bankruptcy lawyer Kevyn Orr the authority to operate Detroit's finances. These powers, the equivalency of a bankruptcy judge, allow Orr to deal with city contracts, the public employee unions and vendors, but not the ability to alter city pension funds. Orr's appointment is the penultimate step to avert the more draconian measures of bankruptcy proceedings.

Orr told a press conference Detroit is the "Olympics of restructuring." He believes he can complete the job with 18 months, the legal time restraint imposed on the Detroit restructuring. Orr's most high-profile bankruptcy involvement was the May 2009 Chrysler Group bankruptcy.

The Detroit City Council opposed Gov. Synder's emergency appointment, but Mayor David Bing supported it. The city council, one supposes, did not support the appointment because it takes them (elected officials) out of the picture. The ball belongs to Orr. If down the way he decides there's no way out of this imbroglio, only he, the city manager, can declare the city bankrupt.

It's reported Orr will earn $275,000 per year to take the tough measures necessary to get Detroit back on some semblance of financial stability. Some 100 people outside the building where the Orr press conference was held protested the naming of a city manager.

It's been a memorial week for Detroit. On Monday March 11, ex-Detroit Mayor Kwame Kilpatrick was convicted of 24 federal corruption charges.