Wednesday, July 31, 2013
A Speedy Bankruptcy for Detroit?
The U.S. Bankruptcy
judge overseeing the city of Detroit's bankruptcy filing has proposed an
October trial date and a deadline of March 1, 1014 for the city to file
its reorganization plan.
In the October
hearing, the court will hear objections to the eligibility of Detroit to file bankruptcy.
If allowed, Detroit’s bankruptcy will be the largest Chapter 9 bankruptcy in
U.S. history. Under the court’s proposed schedule, creditors will have until
August 19 to file their objections to Detroit’s bankruptcy case.
Detroit will need to
prove in October that it cannot pay its debts and has made a good-faith effort
to negotiate with its creditors or that there are simply too many creditors to
reasonably negotiate with.
Tight deadlines would
help Detroit move through the bankruptcy process more quickly. It took
Stockton, California, almost a year to get through the eligibility portion of
the proceedings. With over $18 billion in liabilities for Detroit, a quick
proceeding could get the city back on its feet a little sooner.
posted by Darla @ 1:15 PM
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