Detroit Bankruptcy: Michigan Governor Testifies
by Derek Dowell
Three months ago, Michigan Governor Rick Snyder gave his blessing to the largest bankruptcy filing in U.S. history – the city of Detroit. Today, the governor answered questions from creditors at a private deposition. So far, a whole lot of nothing has happened in the case, if it can even be called that.
No assets have been divided and no deals are in the works. In fact, the legality of the plan to restructure $18 billion in long-term debt is still under debate and will be settled by a trial judge in the near future. At issue is the question of whether or not Detroit should be allowed to even file for bankruptcy.
Initially, Snyder attempted to invoke executive privilege to avoid being called to testify, but U.S. Bankruptcy Judge Steven Rhodes expressed his irritation at that tactic, so the governor agreed to appear. “What I’m going to tell them is the truth and answer their questions honestly and go through that process,” Governor Snyder told reporters.
Snyder has made repeated public statements that bankruptcy was a last resort for Detroit, a population center which has seen 25 percent of its population leave since 2000, but struggles to meet pension and health care obligations undertaken during the halcyon days of the 1990s.
(Image: Flickr | Michigan Municipal League (MML))