Detroit's Bankruptcy Brings Up More Than Finances

California's Desert Hot Springs Holds Short of Bankruptcy

DETROIT Sheilah Johnson was a building inspector for the city for 28 years, a college graduate who passed up jobs that paid more because a city job offered stability and the promise of a good pension. But the city's recent plunge into bankruptcy overseen by an outside emergency manager answerable to the state government, not the citizens of Detroit makes her wonder whether she and other African American residents of the impoverished city will be able to stop Wall Street creditors from seizing what's left of a municipal treasury they paid into for most of their lives. "When my 9-year-old grandson asks me, 'Grandma, are they trying to make us slaves again?' how do I answer that child?" Johnson said, breaking into tears during court hearings over the city's bid to launch the nation's largest-ever municipal bankruptcy. "We do not need a slave owner, and I am not a slave." Much of the trial to determine whether this onetime powerhouse of the American economy is eligible for bankruptcy has focused on such nuts-and-bolts issues as debt structuring and pension liabilities. But the issue of race has hovered persistently around the trial, which wrapped up Friday.
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The Daily Docket: Fagor Enters Bankruptcy

The second Indiana filing was by a subsidiary, ATA Airlines Inc. The company did not immediately respond to a request for comment. Repeat filings are not uncommon. About one-third of larger companies that file for Chapter 11 find themselves back in bankruptcy court within four years, according to research by Edith Hotchkiss, a professor at Boston College, who described the return debtors as "Chapter 22s." Rare are those that end up in court a third time. A paper by Edward Altman, a New York University professor, listed 10 companies that shared that unwanted distinction, including Trans World Airlines and retailers Grand Union Co and Levitz Home Furnishings Inc. But four times appears unprecedented, at least under the current bankruptcy code. Altman noted one four-timer in his 2009 paper, Trans Texas Gas Corp, but its first filing preceded what is considered the modern era of bankruptcy that began with legal changes in 1978.
For the original version including any supplementary images or video, visit http://www.reuters.com/article/2013/11/12/us-globalaviation-bankruptcy-record-idUSBRE9AB17T20131112

Read the DBR article via WSJ . A federal judge on Tuesday shot down Jon S. Corzines bid to dismiss a shareholder lawsuit against him and other formerMF GlobalHoldings Ltd. executives, saying the company told investors it was fine despite dire signs of mounting crisis. Read the DBR article via Nasdaq . Desert Hot Springs, Calif., stopped short of taking steps toward a bankruptcy filing Tuesday but us struggling with its finances, Bloomberg reports . The board for Alitala is set to meet late Wednesday to decide its future, WSJ reports .
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Going for broke: Company's fourth bankruptcy may be a record

Pension Cuts Municipal unions and retired employee groups have argued that Snyder and other state officials pushed the city into bankruptcy court because that was the only way to skirt Michigans constitutional ban on cutting public worker pensions. Rhodes asked both the city and the unions and retiree groups to submit analyses of whether the definition of good-faith bargaining should be affected by labor laws . In its filing today, the union asked Rhodes to send his ruling to the Cincinnati-based Sixth Circuit because there are not enough cases that define such bargaining. Typically, bankruptcy court decisions are first reviewed by a district judge before going to the circuit court. Rhodes has said he would issue his decision on eligibility after all sides have submitted their analyses of good-faith bargaining. Those filings are due today.
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Detroit Union Seeks Automatic Appeal of Bankruptcy Ruling

Its too drastic to consider, Mayor-elect Adam Sanchez, a 55-year-old Democrat, said in an interview. Theres room in this city budget to make the cuts that are necessary without going bankrupt. Desert Hot Springs would be the first community to seek court protection since Detroit did so in July. Two other California cities are in bankruptcy: San Bernardino, with a population of 210,000, and Stockton, whose 292,000 residents made it the biggest municipal case until Detroit. If it seeks Chapter 9 protection, Desert Hot Springs, about 110 miles (177 kilometers) east of Los Angeles , would be making its second pitch to a bankruptcy judge since 2001, when it couldnt afford to pay a legal judgment. The city exited bankruptcy in 2004.
For the original version including any supplementary images or video, visit http://www.bloomberg.com/news/2013-11-13/california-s-desert-hot-springs-holds-short-of-bankruptcy.html