DETROIT MAYOR : NAPOLEON v. DUGGAN

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^ Former Med Center CEO Mike Duggan / Wayne County Sheriff Ben Napoleon

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Yesterday, Detroit voters chose the two finalists who will compete to be the City’s next Mayor : Wayne County Sheriff Benny Napoleon and former Detroit Medical Center CEO Mike Duggan. Napoleon led the printed ballot overwhelmingly. Duggan, however, who had to run as a write-in because he turned in his nomination papers two weeks before he qualified as a city resident.

Still, the results were quite clear. As published by the Free Press, “with 100% of the precincts reporting, (Benny) Napoleon had 28,352 votes or 30% of the total votes cast, to 50,328 votes or 53% for write-in candidates, with (Mike) Duggan presumably garnering the vast majority of those. Duggan said about 97% of write-ins were (for him).”

Total turn-out was low — about 18 % of Detroit’s registered — but higher than prerdicted.

Duggan’s 52 % of the vote, as a write-in, shows that committed voters know very well what they are about. Pundits, especially many who presume to represent today’s version of the GOP, incline to doubt that inner-city people of color, many of them living in poverty, can vote intelligently and negotiate such intricacies as a write-in vote. Anyone who has ever worked a campaign in a large American city knows this put-down to be utterly untrue; yesterday’s 50,328 write-in votes — 97 % for Duggan — disproves these pundits’ nonsense beyond all doubt. Indeed, the city’s write-in voters had to spell Duggan’s name correctly, as there was also another write-in candidacy for a man of the last name “Dugeon.” 97 % of Detroit’s write-in voters knew the difference and knew which difference they wanted. That, dear Here and Sphere readers, is informed voting.

That Mike Duggan happens to be White, in a city in which four of every five voters is of color,l also says something about informed voting and the readiness of voters disparaged by “conservative” pundits to select precisely. Obviously, many Detroit voters have had enough of Mayors who have coasted to office on assumption that voters of color will always vote for mayors of color. Detroit looks to be rising from its ashes, and a substantial portion of its voters are ready to endorse whomever seems likelier to extend that rise. As a successful executive, Mike Duggan clearly made sense to such voters. Thanks to Duggan and his Primary voters, even if, in November, Detroit chooses Benny Napoleon, a man of color and a successful county official, skin color will likely not be the determinant that it has long been presumed.

Indeed, the issue between Duggan and Napoleon is one familiar across most of today’s political America : should local control be led by neighborhood activists or by businessmen ? Duggan says that as a business CEO, he can better convince Michigan’s Governor Snyder to return management of the city to the Mayor’s office — today the city is run by Kevyn Orr, an administrator appointed by Snyder. Napoleon, on the other hand, stresses that citizen involvement, in the neighborhoods — led by him — will free the city from State management sooner.

Either course begins as soon as the next mayor is chosen and well before power to run Detroit is returned to its Mayor pursuant to the city successfully presenting a bankruptcy reorganization plan. Yesterday’s vote starts a saga of a city rising from past miscarriages — the primary of skin color among them.

—- Michael Freedberg / Here and Sphere

THE DETROIT BANKRUPTCY IS A STEP OF PROGRESS

Am re-posting our bankruptcy-law analysis of the Detroit bankruptcy. Updating it, too.

The issue of pension obligations has come to dominate the bigger picture of this bankruptcy. it shouldn’t, for the reasons given in this article. Pensioners will be treated as a separate creditor class, one whose vote to approve any reorganization plan must be given, or the plan cannot be confirmed by the Court.

There is also now a campaign going on to elect a new Mayor, as current mayor Dave Bing declined to run again. Much is being made of the new Mayor’s lack of authority over a city being run by a court-appointed manager. The much being made is beside the point.The campaign raises all sorts of vital issues ; the future of the city — toward what goal or goals / who will be involved / How long will it take ? what about race relations inside the city ? crime ?  schools ? Businesses and zoning ?

All of these will be discussed by the City;s voters, and when, eventually, the mayor to be elected does take control — and that will happen once the City gets its reorganization plan conformed by the court — the discussions and decisions made in this Mayor campaign will ground whatever city will be built thereupon.

Game on. Let the politics begin.

— Michael Freedberg / Here and Sphere

 

Here and Sphere

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^ Detroit : on the move at Movement

Three weeks ago Here and Sphere published Susan Domitrz-Sapienza’s extensively researched story on the comeback of Detroit. As she noted, the economy of “Automobile City” had already reached its bottom and was — and is now — expanding along several lines newly established. The decision of the city’s state-appointed manager to file a Chapter 9 (Municipal) bankruptcy petition would seem, at first, to contradict our reporter’s finding. In fact, the Chapter 9 filing conforms our reporter’s conclusion.

To learn why, one needs to know a bit more about bankruptcy law than the common perception. Most people think of the word “bankruptcy” as the end, a kind of giving up the ghost. This perception is false. There are two kinds of bankruptcy cases. The one that most people think of is “liquidation,” in a liquidation, yes: the petitioner is in fact giving up…

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THE DETROIT BANKRUPTCY IS A STEP OF PROGRESS

Image

^ Detroit : on the move at Movement

Three weeks ago Here and Sphere published Susan Domitrz-Sapienza’s extensively researched story on the comeback of Detroit. As she noted, the economy of “Automobile City” had already reached its bottom and was — and is now — expanding along several lines newly established. The decision of the city’s state-appointed manager to file a Chapter 9 (Municipal) bankruptcy petition would seem, at first, to contradict our reporter’s finding. In fact, the Chapter 9 filing conforms our reporter’s conclusion.

To learn why, one needs to know a bit more about bankruptcy law than the common perception. Most people think of the word “bankruptcy” as the end, a kind of giving up the ghost. This perception is false. There are two kinds of bankruptcy cases. The one that most people think of is “liquidation,” in a liquidation, yes: the petitioner is in fact giving up the ghost — is ending things. There is, however, an entirely different kind of bankruptcy petition : the “reorganization.” In a reorganization filing, the petitioner seeks to restructure its affairs so that they can prosper again. All municipal, Chapter 9 filings are reorganizations.

The reorganizing petitioner seeks to — must — present a reorganization PLAN to the bankruptcy trustee appointed to the case, for approval by its creditors, the Trustee, and the Court. So,me corporate reorganizations fail, but a municipal reorganization cannot : cities have tax revenues that must be paid, and these are quantifiable. all that a city’s reorganization plan needs to is match tax revenues — and maybe also the proceeds of sales of city-owned real estate — to debts. Clearly, in such reorganization, the city’s creditors (including its pensioners) will probably be offered less than full repayment; and yes, each class of creditors must separately approve the reorganization plan. Many amended plans may be filed. But a city’s revenue can be counted on, and, as a reorganization plan may take up to five years to perform, the city’s revenues over that period are likely to offer creditors a fair return.

In addition, financing is often available to reorganization debtors after they file that was not available before ; because (1) post-filing debt is not included in the bankruptcy and thus is not subject to payment of less than full amount due and (2) the reorganization plan, as it becomes an order of court, makes the city’s post-filing credit standing easy to compute. A Detroit bondholder, for example, can readily exchange pre-filing bonds for post-filing bonds, if such are offered.

So much for the bankruptcy law as it applies to the Detroit filing.

The bigger point is that no bankruptcy petitioner files a reorganization until its finances look promising enough for it to present a feasible Plan. Such is the case with Detroit. Its finances are improving. real estate is selling fast. New businesses are starting up. Chrysler’s Jeep Cherokee plant is booming — as was reported recently in the Bew York Times. The Movement EDM Festival is bringing thousands of young visitors to the city on Memorial day weekend. Artists are setting up shop in Detroit, where rents for lofts are cheaper than cheap. Real estate tax revenues will only increase.

All of which is why Detroit’s bankruptcy filing signals the city’s recovery, not its failure.

—– Michael Freedberg / Here and Sphere