19

Coming Soon to a State Near You

 

Puerto Rico has filed bankruptcy:

As per our report last night that following the expiration of the litigation freeze, Puerto Rico’s creditors had filed a barrage of lawsuits against the insolvent Commonwealth a bankruptcy was imminent, moments ago Puerto Rico’s governor announced the commonwealth will request bankruptcy protection of a portion of the island’s $70 billion in debt, setting up a showdown with Wall Street firms owed billions of dollars, in what will be the largest-ever U.S. municipal debt restructuring and further complicating the U.S. territory’s efforts to pull itself out of a financial crisis.

The Puerto Rico restructuring would be far larger than Detroit’s record-setting bankruptcy, with little to no details how long a court proceeding would last or what cuts would are imposed on bondholders. The island’s financial recovery plan covers less than a quarter of the debt payments due over the next decade.

Cited by AP, Gov. Ricardo Rossello said Wednesday that a federal control board overseeing the island’s finances has agreed with his request to put the debts before a court. He told reporters that he has requested that the U.S. territory’s federal financial oversight board commence a Title III proceeding under last year’s Puerto Rico rescue law known as PROMESA. Title III is an in-court debt restructuring process similar to U.S. Bankruptcy. Continue Reading

12

Detroit: Canary in the Mine for Blue States

 

 

 

Detroit has been de facto bankrupt for a very long time and yesterday it became de jure bankrupt with a Chapter 9 bankruptcy for the former Motor City.  Hard to believe that during World War II Detroit was the heart of the American industrial machine that produced more military equipment than the rest of the world combined.  How did the city that helped this nation win a world war end up looking like one of the bombed out cities of Europe circa 1945?  There are many culprits involved but W.R. Mead at his blog Via Meadia knows who the chief villians are:

Detroit has been spending on average $100 million more than it has taken in for each of the past five years. The city’s $11 billion in unsecured debt includes $6 billion in health and other retirement benefits and $3 billion in retiree pensions for its 20,000 city pensioners, who are slated to receive less than 10 percent of what they were promised. Between 2007 and 2011, an astounding 36 percent of residents lived below the poverty line. Last year, the FBI cited Detroit as having the highest violent crime rate for any major American city. In the first 12 years of the new century, Detroit lost more than 26 percent of its population.

And now Detroit’s desperate request for a bailout has been turned down by the Obama White House.

Progressive politicians, wonks, and activists can only blame big corporations and other liberal bogeymen for so long. The truth is that corrupt machine politics in a one-party system devoted to the blue social model wrecked an entire city and thousands of lives beyond repair. The sooner blues come to terms with this reality, the greater chance other cities will have of avoiding Detroit’s fate. Continue Reading

6

It Is An Ill Wind

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Hattip to Instapundit.   As faithful readers of this blog know, I am, for my sins no doubt, an attorney.  My bankruptcy practice has grown 20-25% each year of the Obama administration:

 

Tax refunds being used to pay for bankruptcy filings. “More than 200,000 money-strapped households will use their tax refunds this year to pay for bankruptcy filing and legal fees, says a new study by the National Bureau of Economic Research.” Continue Reading

2

Hard Times and Bankruptcy

Hattip to Ed Morrissey at Hot Air.   As regular readers of this blog know, I am, for my sins no doubt, an attorney.  I was examining the year end stats for my practice, and I noticed that the legal fees I derived from my bankruptcy representation of creditors and debtors almost doubled in 2009 over what they were in 2008.  Therefore, I was little surprised to read that bankruptcies were up 32% in 2009. 

U.S. consumers and businesses are filing for bankruptcy at a pace that made 2009 the seventh-worst year on record, with more than 1.4 million petitions submitted, an Associated Press tally showed Monday.

The AP gathered data from the nation’s 90 bankruptcy districts and found 1.43 million filings, an increase of 32 percent from 2008. There were 116,000 recorded bankruptcies in December, up 22 percent from the same month a year before. Continue Reading