Detroits public school system on the brink of filing bankruptcy

Discussion in 'Wall St. News' started by ASusilovic, Jul 21, 2009.

  1. DETROIT -- Detroit's public-school system, beset by massive deficits and widespread corruption, is on the brink of following local icons GM and Chrysler into bankruptcy court.

    A decision on whether to file for protection under federal bankruptcy laws will be made by the end of summer, according to Robert Bobb, Detroit Public Schools' emergency financial manager. Such a filing would be unprecedented in the U.S. Although a few major urban school districts have come close, none has gone through with a bankruptcy, according to legal and education experts.

    But in Detroit -- where U.S. Education Secretary Arne Duncan dubbed the school system a "national disgrace" this spring -- lawmakers and bankruptcy experts see few alternatives, given the deep financial challenges confronting the district and the state.

    "Am I optimistic that they can avoid it...? I am not," says Ray Graves, a retired bankruptcy judge who has been advising Mr. Bobb in recent weeks.

    As with General Motors Corp. and Chrysler LLC, bankruptcy may not be the worst thing for Detroit's schools. A filing under Chapter 9 of the Bankruptcy Code, which covers public entities like school districts and municipalities, would allow the district to put major creditors such as textbook publishers, private bus operators and DTE Energy, the local gas-and-electric utility, in line for payment. It also would give Mr. Bobb broad latitude to tear up union contracts without protracted negotiations.

    Corruption ? Sounds like a Banana Republic...
  2. The news just keeps getting better and better in that state.
  3. S2007S


    Another positive as the dow heads towards 10,000, I mean 7,000 once again....
  4. skylr33


    This is no surprise, especially in Detoilet.
  5. TGregg


  6. MattF


    Detroit...America's Third World Country
  7. If they fire the incompetent system leaders and their relatives and friends, the system wouldn't consume so much taxpayers' money. It's a system of rampant corruption, everyone in it is milking the taxpayers.

    A system middle level manager has managed to hire at least five relatives or friends. They are using the public jobs as personal favors.

    Have you ever walked into a school and found the secretary, the janitor, or the administration assistant is related to a certain manager within the school? Rampant nepotism!
  8. Honestly, does it make any difference whether they have schools or not in Detroit?
  9. Eight


    Kids can do better on their own than in these public schools if they want to learn...
  10. aegis


    They're better off getting their GED and starting community college early. What a waste of money. Nobody in Detroit wants to learn.
    #10     Jul 21, 2009