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Detroit Bankruptcy Architects: City Must Be Fiscal Stewards, Focus on Regional Inclusion

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Five months after Detroit exited from the largest municipal bankruptcy in the United States, the city’s bankruptcy architects overwhelmingly agree: The path forward requires regional inclusion and keeping leaders accountable.

Thursday’s panel included Kevyn Orr, former emergency manager for the city of Detroit; Steven Rhodes, former judge for the U.S. Bankruptcy Court for the Eastern District of Michigan;  Gerald Rosen, chief judge for the U.S. District Court for the Eastern District of Michigan; and Darren Walker, President, Ford Foundation.

In responding to questions from moderator Mariam Noland, president of the Community Foundation for Southeast Michigan, Rhodes and Orr said Detroiters must “keep their eye on the ball” and hold leaders accountable to make sure the city complies with the court-mandated plan of adjustment milestones to protect creditors and pensioners.

“The one constant is not leadership. Leaders come and go. The constant is on the people to make sure the city’s tremendous obligations are met so it continues to move forward and doesn’t slide back into prior behavior,” Rhodes said.

Walker agreed, stressing that there is tough work ahead in order to build a vibrant and robust economy that includes everyone.

“The challenge for Detroit is overcoming its legacy of inequality and division and not having a regional paradigm,” he said. “In order to be successful, there has to be a regional approach. Detroit won’t be successful if the region is not successful and vice versa.”

Addressing the Grand Bargain, Rosen characterized the cooperation between public and private partners as “visionary and courageous” and said the rest of the state can take several lessons from Detroit’s bankruptcy, which he called “the four C’s”: candor, cooperation, creativity and courage.