This note applies to all editorial boards that want to write on the insolvency and likely bankruptcy filing of Detroit
In a blistering but lightly researched op-ed, the Bloomberg Editorial Board dove into the battle between Detroit’s creditors.
Detroit is a poverty-stricken, run-down city that has hocked most of its assets, slashed its employee payroll, taken on debt at an astonishing rate and been crippled by a group of banks that sold unsophisticated and possibly corrupt interest rate swaps to public officials.
Although the state-appointed emergency manager, Kevyn Orr, professes to be attempting to develop a “voluntary” restructuring, it’s clear that the city now crawls toward federal bankruptcy court. And what are the city’s liabilities? Here is where the Bloomberg Editorial Board goes way off track:
The budget deficit is nearly $380 million, while long-term liabilities may total more than $17 billion.