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  #561  
Old 09-15-2014, 04:51 PM
Abnormal Abnormal is offline
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Originally Posted by twig93 View Post
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If Detroit were a private company in bankruptcy would it be allowed to keep its art collection?
Interesting question. IANAL, but my guess is that it would probably depend on the degree to which the private company needed its art collection to remain a going concern.

If it was a private art museum, whose business relied on having the art available so that it could charge customers to view the art, I imagine that would be treated differently from if it was an airline who had an art gallery at it's corporate headquarters available only to its employees as a unique type of fringe benefit.

I'm guessing that Detroit can claim that its art museum brings in tourists, as well as folks from suburban Detroit, and encourages them to spend money at other businesses (that pay taxes) and thus it's essential to keep the art there.

I can't imagine that the art museum brings in enough money to counter the high prices some of its pieces will fetch at auction. I doubt that there are too many people who would honestly prefer the art to go to auction and wind up in Dubai, however.
I think it's more complicated than that. Just how much of the collection actually "belongs" to Detroit and how much is on loan? Permanent or otherwise. If it's on loan (as opposed to being donated) it does not belong to the city.

And I've never seen anyone address that.
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  #562  
Old 09-17-2014, 12:03 PM
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http://www.freep.com/story/news/loca...mony/15716631/

Quote:

The bankruptcy judge overseeing Detroit's historic restructuring again hinted that conservative estimates of future returns are prudent for the city's pension investments.

Judge Steven Rhodes peppered an actuarial consultant Tuesday with tough questions about the generally accepted practices of U.S. public pension funds, stopping just short of outright blaming pension shortfalls on unrealistic market expectations.

"In your view, is it fair to conclude that the standard practice in the industry ... has been part of the cause of the (underfunding) that public pensions in this country are now struggling with?" Rhodes asked Milliman consultant Alan Perry on Day 9 of the city's bankruptcy trial.

"Yes," the city's consultant responded.

The city is estimating an annual return rate of 6.75% for its two pension investments — down from 7.9% and 8% previously estimated.

Several major financial creditors have objected to the new figure, saying it's artificially low and improperly allows the city to divert money to pensioners to make up for their funding shortfall. But Rhodes has telegraphed on several occasions that he believes Detroit has been making imprudent and unrealistic pension investment decisions and must stop.

Rhodes pressed Milliman's Perry to say whether 6.75% would be a good rate. "Are you telling me that, given Detroit's insolvency, that your view might be that prudence might suggest an even lower rate?" he asked.

Perry responded: "Yes, that might be true."

"No further questions," Rhodes said.
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  #563  
Old 09-21-2014, 07:51 PM
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http://www.freep.com/story/news/loca...ecap/15978295/

Quote:
WEEK 3

Monday, Day 8 of the hearings, solidified the deal announced the previous week in which bond insurer Syncora, Detroit's most vocal opponent in bankruptcy, agreed to drop its objections to the city's exit plan in exchange for $50 million raised through bonds, an extended lease on the Detroit-Windsor Tunnel and a 30-year lease on a city parking garage.

Syncora also issued an unusual apology for attacking the character of Chief U.S. Bankruptcy Judge Gerald Rosen, who's leading mediation talks, as well as mediator Eugene Driker, whom the creditor had accused of "naked favoritism" in favoring pensioners over other creditors.

The deal left bond insurer Financial Guaranty Insurance Co. — with a $1.1-billion claim against the city — as the sole major holdout creditor and weakened its leverage in the case.

.....
■ Day 9: Actuarial science — and some of its shortfalls — took center stage.

The numbers-heavy testimony of actuarial consultants made for less-than-riveting courtroom theater, but Rhodes at one point asked Alan Perry, a consultant with Milliman on city pensions, whether the pension industry itself shares blame for nationwide underfunding of public pension plans. Perry said it does.

While other creditors have argued that emergency manager Kevyn Orr's use of an expected 6.75% rate of return on long-term pension investments is too low, Rhodes expressed concern that an even lower rate might be warranted given Detroit's insolvency.

.......
■ Day 11: The Detroit Institute of Arts returned as the center of attention as its executive vice president Annmarie Erickson testified about the museum's value as a cultural asset to metro Detroit. A consultant who testified on the city's behalf argued that selling DIA assets would diminish the museum's reputation, lead to significant attendance drops, and stop donors from giving "because they would feel their gifts are not being protected."

Rhodes signaled that he views the DIA as a critical asset, one crucial to Detroit's long-term viability, even as creditors argue that the city should sell artworks to pay off debts to creditors.

Up next: Confirmation hearings on Detroit's bankruptcy exit plan is on hold until Sept. 29 to give creditors more time to review the city's latest version of its plan of adjustment. But the hearings on water shutoffs begins at 8:30 a.m. Monday and will be covered via live blog at freep.com.

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  #564  
Old 10-16-2014, 05:53 PM
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I guess this kind of goes here

http://www.freep.com/story/news/loca...cops/17261055/

Quote:
To choke the flow of police officers leaving Detroit for other cities, City Council President Brenda Jones said today she is interested in an ordinance that would force departing police officers to reimburse the city for their training costs, which could amount to thousands of dollars.

"That's ridiculous to lose officers we've trained -- and spent money on training -- to another city," Jones said at today's council meeting.

Jones announced her proposal after hearing police Chief James Craig describe during today's council meeting his department's struggle to keep officers working in Detroit.

Jones did not say how long a Detroit officer would have to stay in Detroit to avoid the financial penalty, nor did she say how much it costs the city to train a police officer. A police department representative told council the training fee was about $5,500 in the past.

Craig said uncertainty created by the city's bankruptcy case and officers' relatively low pay caused many of the departures. He said Detroit was losing 20-25 cops a month when the problem was at its worst.

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  #565  
Old 10-25-2014, 01:32 PM
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Interesting

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A Mystery Bidder Offers $3 Million for 6,000 of Detroit's Worst Homes

Three million dollars can barely buy a new townhouse in Brooklyn these days, but it could be enough to purchase a bundle of more than 6,000 foreclosures up for auction in Detroit.

The cost of dealing with the many blighted buildings included in the Detroit mega-auction means a $3.2 million bid received last week—roughly the minimum allowable bid of $500 per property—will likely prove too high to turn a profit. “I can’t imagine that you are going to make money on this,” says David Szymanski, chief deputy treasurer of Wayne County, which is selling the properties

So it’s all the more mysterious that the auction, opened with little fanfare earlier this month, has attracted any bidder at all. Still, at least one unidentified party is willing to pay $3.2 million take control—and responsibility—for scores of dilapidated homes. In fact, winning the bid could cost the lucky winner a small fortune beyond the auction price.

Finding a way to deal with Detroit’s blight is critical for the city’s future.
Spoiler:
A task force has already called for immediately tearing down 10 percent of all structures. The group surveyed the condition of every Detroit property and identified neighborhoods at a tipping point at which stripping them of blight could keep certain areas from slipping away entirely.

“I had cancer 12 years ago, and this is exactly like cancer,” Szymanski says. “If you don’t get it all, it’s going to come back.”

Wayne County has become a major owner of blighted properties, which it can seize when owners fall behind on taxes. The scale of its distressed holdings is unprecedented. When Szymanski joined the treasurer’s office four years ago, he called the treasurer of Cuyahoga County in Ohio to compare notes. His counterpart, whose domain includes Cleveland and was a bellwether during the housing crisis, asked: “Are you sitting down? We are foreclosing on 4,500 properties.” Szymanski says he replied: “I hope you’re laying down.” At the time, Wayne County had 42,000 properties in foreclosure.

The numbers have become only more staggering. This year alone, Wayne County has started foreclosure proceedings on 56,000 properties, with about 20,000 of them headed for auction. In 2015 county officials expect to foreclose on an additional 75,000 parcels.

In the past, these have been sold off individually or in small batches. That method didn’t always go well. More than three-quarters of the buyers soon fell behind on taxes, starting the cycle all over again. In 2011, as the Detroit News reported, some buyers were falling behind on taxes and going through foreclosures, only to repurchase their former properties—now cleansed of the back taxes. The county has since changed the rules.

Discussion among county and city officials about trying a bulk sale of Detroit’s least-desirable real estate never yielded results until after Detroit’s current mayor, Mike Duggan, was elected in 2013. But before the properties can be transferred to the city, which can offer them at lower prices, the law requires a county-level auction.

“The idea was that no one would buy it,” Szymanski explains, so they would pass on to the city to handle. A closer look at the so-called blight bundle (PDF) created for the auction makes it clear why that auction is no bargain. The parcel includes roughly 3,000 properties that need to be torn down, plus some 2,000 empty lots, plus about 1,000 homes that are believed to hold some value. Everything is sold as is: The homes may lack furnaces or wiring and they may come with mold, tenants, or both.

To top it off, a condition of the auction requires the buyer to demolish the rundown buildings within six months—something Szymanski estimates will cost about $24 million.

Yet someone actually wants to buy the whole blight bundle. A single qualified bidder—Szymanski can’t reveal any details because the auction is still open—came forward and cleared the minimum bid. “It could be—and this is all speculation—that the people who are bidding on it are altruistic in nature,” Szymanski hints. He believes he has already met representatives of the group behind the $3.2 million offer, but he can’t say for sure.

Why would a philanthropist buy the properties outright from the county, instead of working with Detroit to take care of things? Szymanski has a theory here, too: “If you look at the history of the governance of Detroit, you’d see that our mayor, a few mayors ago, is currently in prison. There’s a fund of about $20 million of insurance proceeds meant to demolish homes that has sat without being spent. There are numerous efforts to demolish the properties that haven’t happened in the past.” While Szymanski expresses “tremendous” confidence in the city’s current leader—Detroit Mayor Duggan, he says, ”understands the importance of dealing with blight”—there’s good reason for do-gooders to be wary of politicians.

The county has sold some smaller bundles of blight before, including a few dozen parcels around the abandoned Packard Plant. That auction netted more than $400,000. “In my mind, if I gave it to somebody for nothing and they make something out of it, that’s a win to me,” Szymanski says. Just this month, work started on redeveloping the former automobile factory

The bigger chunk of foreclosed Detroit would seem infinitely more daunting for a buyer. But there’s still time for a bidding war on the blight bundle. A dozen potential buyers submitted the required deposits to submit bids, and a few days remain before the auction closes on Oct. 28.
http://www.msn.com/en-us/money/reale...j8?ocid=OIE9HP
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Last edited by Abnormal; 10-25-2014 at 02:12 PM..
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  #566  
Old 10-25-2014, 04:16 PM
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hmmmmmmmm
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  #567  
Old 10-25-2014, 04:46 PM
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Seems like a great idea. Pay $500 for a home that is being foreclosed. Don't pay any taxes, let them foreclose on it in a year or two, then buy another one.

They seem to have raised the price. I thought it was $1 before.
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Old 10-27-2014, 07:13 AM
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http://m.washingtonexaminer.com/article/2555009

Quote:
The city of Detroit agreed this week to raze the Joe Louis Arena, the home of the Red Wings hockey team, and hand the land over to one of its corporate creditors in order to satisfy a small portion of a $1 billion debt.

The move brings the Motor City closer to resolving its June 23, 2013 bankruptcy filing. The settlement will leave creditors with pennies on the dollar and retired public employees with only about half of what they were promised.

Municipal bankruptcy was the only way for Detroit, which until recently ran annual deficits as high as $380 million, to discharge its $18.5 billion in debt. Years of dramatically overstaffed city agencies, over-generous retirement promises to public employee unions, and white-elephant development projects had left the city unable to police its streets, keep street lamps on, maintain parks, or provide other basic government services, no matter how much the city government raised taxes.

The lesson of Detroit is one that governments everywhere can learn: In a world with finite resources, governments that try to do too much end up neglecting even the essential.

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Old 10-27-2014, 10:28 AM
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Have to wonder if the block of homes mentioned above is anywhere near the Joe Louis Arena?
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  #570  
Old 10-27-2014, 02:26 PM
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I guess it's more or less done.

Until they fail again.

http://mobile.businessweek.com/news/...ection-to-plan

Quote:
Detroit’s pension debt holders dropped the last major objection to the city’s $7 billion debt-cutting plan, as the biggest U.S. municipality to file bankruptcy began its last push to leave court oversight.
Investors who hold the debt, including hedge fund managers Aurelius Capital Management LP and and BlueMountain Capital Management LLC, waited to join the last creditor settlement in the bankruptcy case.
The settlement was announced on the same day Detroit’s bankruptcy lawyer, Bruce Bennett of the law firm Jones Day, began making the city’s final legal argument in favor of the debt-cutting plan.
No other U.S. city or county has ever cut so much debt so quickly, he said.
“The end really is in sight,” Bennett told U.S. Bankruptcy Judge Steven Rhodes. “The city has settled with all the major economic players in the city of Detroit.”
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