News / USA

    Detroit Seeks Path to Solvency

    Detroit Becomes Largest US City to Declare Bankruptcyi
    X
    July 19, 2013 9:21 PM
    After years of population decline, a faltering auto industry and financial mismanagement by the city's government, Detroit has filed for Chapter 9 bankruptcy protection in federal court. It's the largest municipal bankruptcy in U.S. history, with the city listing more than 100,000 creditors. As VOA's Kane Farabaugh reports that Detroit's financial fate now rests in the hands of a bankruptcy judge as a local judge tries to block the move.
    After years of population decline, a faltering auto industry and financial mismanagement by the city's government, Detroit has filed for Chapter 9 bankruptcy protection in federal court. It's the largest municipal bankruptcy in U.S. history, with the city listing more than 100,000 creditors. Detroit's financial fate now rests in the hands of a bankruptcy judge as a local judge tries to block the move.

    As talks broke down with some of Detroit’s major creditors, Michigan Governor Rick Snyder told reporters the state of Michigan was out of options. “The city is basically broke,” he said.

    Detroit’s bankruptcy petition, filed by state appointed Emergency Manager Kevyn Orr, lists the General Retirement System and the Police and Fire Retirement System of Detroit as two of the largest creditors, with a combined $2.5 billion in unfunded liabilities.  

    Orr estimates the city’s annual budget deficit at more than $300 million, with it’s long-term debt close to $20 billion. It’s money the city simply doesn't have.

    “What shocked me was the tolerance of this behavior for decades. This has been going on for a very long time, and to say the least, it is at best unorthodox in terms of how these things were going,” said Orr.

    Other Municipal bankruptcies in the US

    • City of San Bernardino, California filed 8/01/2012.  Debt = $46 Million
    • City of Stockton, California filed 6/28/2012.  Debt = $26 Million
    • Jefferson County, Alabama filed 1/9/2011.  Debt = $4 Billion
    • Central Falls, Rhode Island filed 8/1/2011.  Debt = $21 Million
    The bankruptcy is another blow to Detroit. Resident Everett Cottrell said the city has struggled to shed its image of urban blight and  perpetual decay.

    "They [outsiders] think Detroit is a dump. No respect. It's a dump now. Big old Detroit can't even handle its own business? That's sad," said Cottrell.

    Leland Harrison, another resident, blames Detroit’s fiscal mess on neglect by city leaders. He sees Emergency Manager Orr’s bankruptcy filing as a last resort.

    "Well, they've had enough time to straighten it out. So I guess, as they say, 'if you can't handle it yourself, someone else will.' So I guess they did," said Harrison.

    Some residents are concerned city assets could be liquidated to help pay the bills, including the large collection of paintings, sculptures and historic artifacts at the Detroit Institute of Arts. One piece is the puppet "Howdy Doody" from the iconic children’s TV show of the 1950s.  

    Orr tried to allay concerns. “Right now there is nothing for sale, including Howdy Doody,” he said.

    But no bets are off the table. The fate of the city’s assets rests with a federal bankruptcy judge, who has yet to be appointed.

    • Inside the abandoned and decaying manufacturing plant of Packard Motor Car in Detroit, Michigan.
    • General Motors' world headquarters is the tallest building along the Detroit skyline.
    • Vacant and blighted homes in an eastside neighborhood of Detroit, Michigan.
    • Carla Lyons holds her bidders card as nearly 9,000 foreclosed Detroit area properties are being auctioned off at the International Center Building in Detroit. Picture taken October 19, 2009.
    • The inside of the abandoned "Martyrs of Uganda Catholic Church in Detroit. When a Catholic church closes, the land and buildings go back to the archdiocese. If a new tenant doesn't materialize, criminals sometimes do.
    • Tony Majka uses his iPhone to photograph inside an abandoned home in Detroit. Under the name "Tony Detroit," he's been taking photos of the city's many abandoned structures with an iPhone and posting them on Instagram. The simple shots of Detroit's desolation has earned him better than 300,000 followers.
    • June, 1983: An employee works on the assembly line at the Cadillac carmaker plant in Detroit.
    • The abandoned Packard Motor Car Company building that ceased production in the 1950's.
    • Graffiti in downtown Detroit.
    • A crushed vehicle at U.S. Auto Supply in Detroit.
    • People look for clothes at the Capuchin Soup Kitchen service center in Detroit, where hundreds of people receive food and supplies every day.
    • Christopher Dodd (L), chairman of the U.S. Senate Banking Committee and Sen. Richard Shelby (R-AL) listen to testimony from the leaders of the big Detroit automakers during hearing on a financial assistance package in Washington, December 2008.
    • Abandoned brick homes on the east side of Detroit.
    • Detroit Mayor Dave Bing (left) speaks at a news conference, July 18, 2013. State-appointed emergency manager Kevyn Orr is on the right.

    Kane Farabaugh

    Kane Farabaugh is the Midwest Correspondent for Voice of America, where since 2008 he has established Voice of America's presence in the heartland of America.

    You May Like

    Turkey, US Splits Deepen Over Support for Kurdish Militants

    Ankara summons American ambassador to protest remarks by State Department spokesman who said Washington does not consider Syria's Kurdish Democracy Union Party (PYD) a terrorist organization

    Obama Seeking $19 Billion for National Cybersecurity

    Move, touted as attempt to build broad, cohesive federal response to cyberthreats, calls for increase in cybersecurity spending across all government agencies

    Video Foreign Policy Weighs Heavy for Some US Voters

    VOA talks to protesters in Manchester, New Hampshire, who sound off on foreign policy issues such as the Guantanamo Bay prison, the Israeli-Palestinian conflict and the wars in Iraq, Syria and Yemen

    This forum has been closed.
    Comment Sorting
    Comments
         
    by: Yoshi from: Sapporo
    July 22, 2013 1:08 AM
    How come Detroit has fallen to bunkrupcy? Some one would say Japanese cars has sold too much in America. Some one would say extreme open marcket has broken down Detroit's major industry. Who can say it is completely idiot to think abot to return to commercial protectionism? US must have enough domestic marcket for its firms to employ national workers, manage pubric utilities and offer welfare survices. US stands at a favorable position than us Japan in terms of tolerance to protectionism.

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Valentine's Day Stinks for Lebanese Clownsi
    X
    February 09, 2016 8:04 PM
    This weekend, on Valentine's Day in Lebanon, love is not the only thing in the air. More than half a year after the country's trash crisis began, the stink of uncollected garbage remains on the streets. Step forward "Clown Me In," a group of clowns who use their skills for activism. Before the most romantic day of the year the clowns have released their unusual take on love in Lebanon -- in a bid to keep the pressure up and get the trash off the streets. John Owens reports from Beirut.
    Video

    Video Valentine's Day Stinks for Lebanese Clowns

    This weekend, on Valentine's Day in Lebanon, love is not the only thing in the air. More than half a year after the country's trash crisis began, the stink of uncollected garbage remains on the streets. Step forward "Clown Me In," a group of clowns who use their skills for activism. Before the most romantic day of the year the clowns have released their unusual take on love in Lebanon -- in a bid to keep the pressure up and get the trash off the streets. John Owens reports from Beirut.
    Video

    Video Rocky Year Ahead for Nigeria Amid Oil Price Crash

    The global fall in the price of oil has rattled the economies of many petroleum exporters, and Africa’s oil king Nigeria is no exception. As Chris Stein reports from Lagos, analysts are predicting a rough year ahead for the continent’s top producer of crude.
    Video

    Video Foreign Policy Weighs Heavy for Some US Voters

    VOA talks to protesters in Manchester, New Hampshire who sound off on foreign policy issues such as the Guantanamo Bay Prison, the Israeli-Palestinian conflict, Middle East Affairs and national security.
    Video

    Video 'No Means No' Program Targets Sexual Violence in Kenya

    The organizers of an initiative to reduce and stop rape in the informal settlements around Kenya's capital say their program is having marked success. Girls are taking self-defense classes while the boys are learning how to protect the girls and respect them. Lenny Ruvaga reports from Nairobi.
    Video

    Video New Hampshire Voters Are Independent, Mindful of History

    Once every four years, the northeastern state of New Hampshire becomes the center of the U.S. political universe with its first-in-the-nation presidential primary. What's unusual about New Hampshire is how seriously the voters take their role and the responsibility of being among the first to weigh in on the candidates.
    Video

    Video Chocolate Lovers Get a Sweet History Lesson

    Observed in many countries around the world, Valentine’s Day is sometimes celebrated with chocolate festivals. But at a festival near Washington, the visitors experience a bit more than a sugar rush. They go on a sweet journey through history. VOA’s June Soh takes us to the festival.
    Video

    Video 'Smart' Bandages Could Heal Wounds More Quickly

    Simple bandages are usually seen as the first line of attack in healing small to moderate wounds and burns. But scientists say new synthetic materials with embedded microsensors could turn bandages into a much more valuable tool for emergency physicians. VOA’s George Putic reports.
    Video

    Video Bhutanese Refugees in New Hampshire Closely Watching Primary Election

    They fled their country and lived in refugee camps in neighboring Nepal for decades before being resettled in the northeastern U.S. state of New Hampshire -- now the focus of the U.S. presidential contest. VOA correspondent Aru Pande spoke with members of the Bhutanese community, including new American citizens, about the campaign and the strong anti-immigrant rhetoric of some of the candidates.
    Video

    Video Researchers Use 3-D Printer to Produce Transplantable Body Parts

    Human organ transplants have become fairly common around the world in the past few decades. Researchers at various universities are coordinating their efforts to find solutions -- including teams at the University of Pennsylvania and Rice University in Houston that are experimenting with a 3-D printer -- to make blood vessels and other structures for implant. As VOA’s Greg Flakus reports from Houston, they are also using these artificial body parts to seek ways of defeating cancerous tumors.
    Video

    Video Helping the Blind 'See' Great Art

    There are 285 million blind and visually impaired people in the world who are unable to enjoy visual art at a museum. One New York photographer is trying to fix this situation by making tangible copies of the world’s masterpieces. VOA correspondent Victoria Kupchinetsky was there as visually impaired people got a feel for great art. Joy Wagner narrates her report.
    Video

    Video German Artists to Memorialize Refugees With Life Jacket Exhibit

    Sold in every kind of shop in some Turkish port towns, life jackets have become a symbol of the refugee crisis that brought a million people to Europe in 2015.  On the shores of Lesbos, Greece, German artists collect discarded life jackets as they prepare an art installation they plan to display in Germany.  For VOA, Hamada Elrasam has this report from Lesbos, Greece.
    Video

    Video E-readers Help Ease Africa's Book Shortage

    Millions of people in Africa can't read, and there's a chronic shortage of books. A non-profit organization called Worldreader is trying to help change all that one e-reader at a time. VOA’s Deborah Block tells us about a girls' school in Nairobi, Kenya where Worldreader is making a difference.
    Video

    Video Genius Lets World Share Its Knowledge

    Inspired by crowdsourcing companies like Wikipedia, Genius allows anyone to edit anything on the web, using its web annotation tool
    Video

    Video In Philippines, Mixed Feelings About Greater US Military Presence

    In the Philippines, some who will be directly affected by a recent Supreme Court decision clearing the way for more United States troop visits are having mixed reactions.  The increased rotations come at a time when the Philippines is trying to build up its military in the face of growing maritime assertiveness from China.  From Bahile, Palawan on the coast of the South China Sea, Simone Orendain has this story.