Lesson from Detroit The Regulatory Reform Urban Democrats Hate
The Detroit bankruptcy is giving some Wall Street firms a splitting headache. The embattled city’s emergency manager Kevyn Orr is pursuing a lawsuit that would let the city stop making payments on a $144 billion pension deal centering on what the city’s lawyers are now calling “sham” contracts.
Lesson from Detroit It’s Expensive Being Broke
It’s beginning to look like Detroit’s bankruptcy will come in with a pretty hefty price tag. Despite being effectively broke, the city has already spent an astonishing $28 million on fees for lawyers and consultants brought on to assist with the process, some of whom are earning nearly $200,000 per month. The lesson for other cities: Bankruptcy is expensive and should be avoided if at all possible.
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