Full speed ahead for Detroit's bankruptcy case
Updated On: Aug 21 2013 07:41:48 PM EDT
The city of Detroit's Chapter 9 bankruptcy case is moving along at a fast clip.
If federal bankruptcy Judge Steven Rhodes can keep all those involved on his proposed schedule, the city could enter and exit bankruptcy in a mere 7 and 1/2 months.
One reason for the fast track is money. The city is already spending heavily on attorneys handling the case. Plunkett Cooney bankruptcy attorney Doug Bernstein said another issue is the limited tenure allowed for the city's emergency manager.
"He understands that the city, to the extent they need to get their plan of adjustment through, really needs to do it while Kevyn Orr is in place, rather than start over with somebody new to the situation and that would just gum up the works," Bernstein said.
Former bankruptcy judge Ray Reynolds Graves said the speed of the process matters to Wall Street.
"No one wants to invest in a city that's been in bankruptcy three, four or six years. So it's in everyone's beset interest to move it along and I think judge Rhodes is trying to do that with open fairness to all parties," Graves said.
Graves added that financially troubled cities across the country are watching developments closely.
"I think it is remarkable, it is unusual and Detroit is going to write the book n how to do a Chapter 9 expeditiously and fairly," Graves said.
Even with more than 100 objections to Detroit's qualifications for bankruptcy, both Doug Bernstein and Ray Reynolds Graves said they expect judge Rhodes will be reluctant to allow many delays in the process.