DETROIT OFFICIALS MUST SEEK CHAPTER 9 BANKRUPTCY PROTECTION

Group Urges Detroit to Go on Offense To Stop EFM and Protect City Assets

From Tom Barrow, previous mayoral candidate

(DETROIT (JANUARY 8) —-A Detroit civic organization, Citizens For Detroit’s Future (CFDF), headed by prominent Detroit accountant Tom Barrow, today delivered letters to Detroit’s elected leaders calling on them to accept that the railroad is running towards the city and is controlled by conservative interests seeking to take the City’s coveted resources and assets.

Recount hearing on 2009 Detroit mayoral elections, requested by candidate Tom Barrow (l) was packed with his supporters. The Wayne County Board of Canvassers found that over 60 percent of the ballots, including all the absentee ballots, were unrecountable. Was Dave Bing really elected by the people?

“It is clear to city residents and our suburban neighbors– Detroiters all–that our city is being maligned daily and a conservative agenda being perpetrated against it to get what our late Mayor Young called, the city’s ‘Crown Jewels’,” said Barrow.

CFDF has long taken the public stance that a Detroit Emergency Financial Manager (EFM) will be appointed no matter what the Mayor or Council does. Therefore, the city must get off of defense and go on offense to protect the city’s jewels.

“If Detroit’s Mayor and Council continue to act like lambs, conservatives will continue to feast like lions.” Barrow said.

Contrary to the view by some on the city’s council, “it is naive to believe that if you take draconian actions desperately trying to satisfy unrealistic milestones, extremists will somehow like you, be pleased and stop coming after at you…they will not because their agenda is rooted in a phony fiscal ruse which can never to be satisfied.” Barrow explained.

States with municipalities authorized to file for bankruptcy under Chapter Nine of the US Bankruptcy Code.

CFDF’s Executive Board passed a resolution calling on Detroit’s city council to immediately order the city’s law department, not Miller-Canfield, to explore Detroit’s options under Title 11 of the US Bankruptcy Code at Chapter 9, specifically designed for municipalities.

Why a municipal bankruptcy reorganization? Because it is vastly preferable to a state appointed EFM.

Barrow, who has been appointed by the federal courts as a trustee in multiple corporate bankruptcies in the past, said “I understand the process.”

CFDF believes that a conservative railroad is running on tracks designed by the Koch Brothers, Devos and Walton Foundations. These conservative financiers’ plan of EFMs, right-to-work and voter suppression efforts is operating nationally and here in Michigan and goes like this:

First, the EM will be appointed by the conservative state and will be someone we recognize but who has quietly bought into the conservative right-wing philosophy and will wear a seeming Democrat’s suit;

DWSD workers picket Huber plant in Aug. 2012 before striking the Wastewater Treatment Plant in September for one week. They demanded not only preservation of city ownership of DWSD, but also protection of their pensions. Public pension plans may be endangered under a bankruptcy filing.

Second, s/he will render the elected Mayor and Council impotent (thus the people silent);

Third, s/he will sell or transfer city assets including the water department and Belle Isle etc. to private outside interests using the fiscal ruse a la Pontiac, Flint, Benton Harbor, Ecorse etc.;

Fourth, the EFM then will decimate the city’s unions and privatize multiple clear government functions; and

Fifth, its most impactful effect on our over 230-year old democracy, the EFM once in, no matter what anyone says, will last indefinitely and not be accountable to anyone in Detroit. (Just Look at Detroit Public Schools) and become an indefinite overseer.

Conversely under a self-imposed Chapter 9 Reorganization, the Mayor and Council control everything. City assets remain under the ownership of the city and cannot be sold or transferred and the Mayor and Council is given absolute power to set aside any contract they decide.

While a Chapter 9 Mayor and Council can set aside a union contract, a new Mayor and Council will have the same power to re-instate any contract or whatever has been done during that short and interim period.

Linda Willis participates in downtown Detroit protest May 9, 2012 demanding payback from the banks.

But most importantly, because Detroiters are in control and because the primary concern of the bankruptcy court will be the Bond Debt with which the city is fine, it should immediately re-affirm all General Obligation and Special Revenue Bond debt to reassure the financial markets. The city can then on its own:

– Set aside any state or local agreement, including having the ability to abrogate the Consent Agreement, and the Memorandum of Understanding;

– Dissolve the Financial Advisory Board and remove the state’s two $260,000 per year imbedded operatives and all other state operatives whom we have been forced to hire.

In short, by judicious use of Chapter 9, the city can get the state out of its business and allow the current and future Mayors and Councils to run the city subject only to the Court and without state interference. The mayor and council can decide when to emerge from the Bankruptcy Reorganization. Should the city need to borrow it need only ask the court, not Treasurer Andy Dillon or Governor Rick Snyder.

Fitch Ratings Joe O’Keefe (3rd from left0 and S & P’s Stephen Murphy (2nd from right) pressured Council to borrow $1.5 billion in Pension Obligation Certificates unnecessarily in Jan. 2004, from UBS whiah has now admitted to massive fraud.

CFDF has railed repeatedly that the city was NOT running out of cash and that the state’s claims were a ruse orchestrated by their imbedded operatives to generate a false flag media furor to make the city appear inept and incapable of managing it’s finances.

State operatives, with the complicity of some naive elected officials (Note: none of our elected officials are trained in finance), falsely pushed city leaders to borrow money they did not need and then use the funds as a faux bludgeon to demand compliance with a conservative privatizations of city services and hiring more state operative.

All while the city is sitting on a half a billion dollars in its own water department, half of which is “unrestricted” and which, properly structured, could have been used to borrow from ourselves with the interest paid to ourselves.

International Underground Railroad Monument in Detroit’s Hart Plaza.

Around the end of November, the state’s bluff was called by a Council super-majority, 8-1, legitimately concerned with Miller-Canfield’s obvious conflicts representing all sides, the State, the City and even itself (inserted into the MOU with a requirement that the firm be hired “or else”), our Mayor was forced to admit that we would not be running out of cash and will last through the Spring of 2013, contradicting three years of Chicken Little shouts of “We’re running out of money!” That entire argument has now gone quietly away.

Yet, state operatives continue to set up faux milestones designed to get their EFM and make it appear rational and Detroiter’s own fault. This to provide justifications to disintegrate city unions, privatize essential government services and city’s departments and ruining city workers lives, further depressing the local economy.

Trains have been very good to Detroit in the past, but not this one. Our local history, from the metaphorical Underground Railroad that delivered escaped enslaved people to Canada via Detroit; to the great railways that delivered the Arsenal of Democracy in World War II; to the automobile makers receiving steel and supplies from across the nation, it served as a symbol of the city’s dominance. This train, conducted by a conservative Gov. Snyder, however, is steaming toward downtown Detroit to load up on city jewels and must be derailed with this very prudent and necessary step to solvency.

(VOD is researching the issues surrounding a bankruptcy filing, which many Detroiters called for at a City Council meeting today, and will later publish an independent article. An alternate proposal that VOD has raised for years is a moratorium on the city’s massive debt to the banks, a result of predatory lending advanced by Wall Street. As Councilwoman JoAnn Watson has raised, corporations owe Detroit over $800 million.

Additionally, dozens of cities, states and other borrowers are suing global banks including UBS, largely responsible for Detroit’s debt, for rigging interest rates in the LIBOR scandal. UBS just paid the U.S. a $1.5 billion fine, admitting to criminal fraud.)

For more information on how a municipal bankruptcy works, click on http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics/Chapter9.aspx