Last year, several California cities filed for Chapter 9 municipal bankruptcy to help restructure operations and reorganize finances. Emerging in a more financially sound state, other major U. S. cities are considering similar measures to help manage their financial troubles.
Motor City Survival
Detroit is home to the nation’s largest automobile manufacturing company, General Motors. GM was once the center of criticism for their acceptance of the largest government bailout in history, but has since regained the perception of stability after having met their debt obligations to the White House just a few short years ago.
How did GM manage to repay such a large liability when sales have been less than stellar in recent years? Bankruptcy.
Following in the optimistic footsteps of GM’s debt restructuring success, Detroit may make a move into Chapter 9 in efforts to save a town of hardworking hopefuls. Although not everyone views the city’s consideration of bankruptcy as a good prospect, the fact remains that something significant must be done to improve the perpetually declining operations of the city. With a huge chunk of the city’s property taxes sitting in delinquency and a complex set of labor agreements with union workers, city officials must find a way to balance revenue and expenses in a way that can protect their future.