Consultants

Lessons Learned from Detroit's Bankruptcy

MuniNet Guide
November 10, 2014

In this article published by MuniNet Guide, Jim Spiotto outlines eight lessons learned from Detroit's historic Chapter 9 bankruptcy:

  1. Do not defer funding of essential services and infrastructure.
  2. Labor and pension contracts under state constitutional and statutory provisions should not be interpreted as a suicide pact.
  3. Don't question that which should be beyond questioning and is needed for the long-term financial survival of the municipality.
  4. Debt adjustment is a process, but a recovery plan is a solution.
  5. Successful plans of debt adjustment have one common feature: virtually all significant issues have been settled and resolved with major creditors.
  6. One size does not fit all.
  7. A recovery plan must provide for essential services and infrastructure.
  8. Confirmation of a plan of debt adjustment is only the beginning of the journey to financial recovery—not the end.

Click here to read the full article on MuniNet Guide.