Bankruptcy Forum Held To Give Public A Preview Of Process
DETROIT (WWJ) – One week after the city of Detroit filed for Chapter 9 bankruptcy, WWJ Newsradio 950′s Beth Fisher reports, a panel of experts gave the public a rundown on the process at Wayne County Community College in Detroit.
And, one expert, former federal bankruptcy Judge Ray Reynolds Graves says the filing might not pass muster when it comes to whether Detroit emergency manager Kevyn Orr bargained in good faith with city creditors.
“Did he do that before this case was filed? I don’t think so,” said Judge Graves.
In order to make a plan work, to get a confirmed plan, … you have to start selling off assets putting more money in the pot to pay the creditors, that’s where we are, so that puts everything at risk,” Judge Graves said.
Despite the challenges, Judge Graves is hoping for a speedy process.
“If this thing lingers for three or four or five years, you’ll begin to see a loss of business confidence – primarily on the East Coast – where people will sit around and say ‘are we going to invest in Detroit?, Are we going to issue new bonds for Detroit? My goodness, this thing is dragging on forever,’” said Judge Graves.
Former Detroit Councilwoman Sheila Cockrel, however, says many have to get out of denial.
“It is absolutely true promises have been made every single person who has a pension with this city – is a promise that has no way to fund.
It’s complex, it’s messy – there is a lot of denial in the process and from a business perspective – that creates a real challenge,” Cockrel said.
Reynolds Graves says Judge Rhodes has a status conference August 2nd & says he’ll try to compress the calendar to move things along. He & others here say there’s no way to know what will happen with pending litigation.