Detroit Free Press (December 3, 2013)
Detroit became the biggest municipality—in fact the biggest public entity of any type—to file for bankruptcy in the U.S. after a federal judge approved the city’s application. With estimated debts of $18 billion, the city is hardly functioning. It takes nearly an hour for police to respond to calls, versus about six times longer than the national average. For many, the bankruptcy filing marks the first painful step to a comeback. Detroit’s Emergency Manager Kevyn Orr hopes to achieve improvements in basic services and the removal of 78,000 blighted homes and structures within three years. “That may sound like elementary stuff to people who are used to living in less-dysfunctional cities. In Detroit after decades of distress, however, it’s what dreams are made of.”
Tags: Bankruptcy, Basic services, Blight, Comeback, Debts, Detroit, Distress, Dreams, Dysfunction, Kevyn Orr, Police, U.S.
Detroit Free Press (July 19)
Detroit became the largest U.S. city to file for bankruptcy, hoping to escape nearly $20 billion in debt. “The word bankruptcy provokes an intense emotional response. Instinctively, many Detroiters feel the news is horrible and is synonymous with defeat. Fear kicks in as we envision our city being shut down and sold for scrap…. In fact, it is the exact lifeline we need to unshackle our town from the mismanagement, corruption and incompetence of the past in order to get on with the real work of rebuilding Detroit.”
Tags: Bankruptcy, Corruption, Debt, Detroit, Incompetence, Lifeline, Mismanagement, Rebuilding, U.S.
Wall Street Journal (November 17)
Hostess, the maker of iconic American junk food like Twinkies, filed for bankruptcy. “On Friday it shut down its 33 bakeries and 565 distribution centers and prepared to fire nearly 18,500 employees en masse and auction off its brand and recipe portfolio.” The bakers and other unions succeeded in killing “an American classic, and 18,500 of their own jobs” because they refused to make concessions which might have turned the enterprise profitable. Hostess lost $341 million on sales of $2.5 billion in 2011.
Tags: Bankruptcy, Concessions, Hostess, Twinkies, Unions
The Economist (July 26)
“Europe kills entrepreneurialism…. It has created only one of the world’s 500 biggest firms since 1975; California has given birth to 26.” Among the hurdles are conservative bankruptcy laws, weak funding opportunities and inflexible labor regulations.
“Europe kills entrepreneurialism…. It has created only one of the world’s 500 biggest firms since 1975; California has given birth to 26.” Among the hurdles are conservative bankruptcy laws, weak funding opportunities and inflexible labor regulations.
Tags: Bankruptcy, California, Entrepreneurs, Europe, Funding, Labor regulations
New York Times (April 23)
The United States Postal Service (USPS) has been hard by declining volume. “Bread-and-butter revenue from first-class mail has been evaporating as most bills are now paid on the Internet.” As a result, the USPS is planning to file for bankruptcy on May 15, unless Congress provides approval to close 3,700 post offices, combine regional processing centers and quit delivering the mail on Saturday. The New York Times believes Congress should provide the USPS with the flexibility is seeks.
The United States Postal Service (USPS) has been hard by declining volume. “Bread-and-butter revenue from first-class mail has been evaporating as most bills are now paid on the Internet.” As a result, the USPS is planning to file for bankruptcy on May 15, unless Congress provides approval to close 3,700 post offices, combine regional processing centers and quit delivering the mail on Saturday. The New York Times believes Congress should provide the USPS with the flexibility is seeks.
Tags: Bankruptcy, Closures, Congress, Mail, Postal Service, U.S.
New York Times (September 5)
The United States Postal Service (USPS) stands on the verge of bankruptcy. Volume has been shrinking in the digital age and the USPS deficit is expected to reach $9.2 billion by the end of the current fiscal year. The postmaster general, Patrick R. Donahoe, is seeking Congressional approval of his plan for “eliminating Saturday mail delivery, closing up to 3,700 postal locations and laying off 120,000 workers.” Without drastic measures, the USPS will default on pension payments this month and “sometime early next year… run out of money to pay its employees and gas up its trucks… forcing it to stop delivering the roughly three billion pieces of mail it handles weekly.”
New York Times (March 3)
In the U.S., conservatives are creating false alarm that federal and state governments may go bankrupt. “A country with a deficit is not necessarily any more ‘broke’ than a family with a mortgage or a college loan. And states have to balance their budgets. Though it may disappoint many conservatives, there will be no federal or state bankruptcies.”
Tags: Bankruptcy, Budget, Government, U.S.
