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Detroit Chamber CEO: Detroit bankruptcy ‘bold step’ needed to solve fiscal woes


By David Muller

July 19, 2013 


DETROIT, MI – Detroit Regional Chamber President and CEO Sandy K. Baruah said that the city’s filing for Chapter 9 federal protection under the U.S. Bankruptcy Code is a “bold step needed to finally address Detroit’s financial problems in a meaning and sustainable way.”

Detroit became the largest American city to ever seek bankruptcy, after state-appointed Emergency Manager Kevyn Orr was apparently unable to successfully negotiate an alternative for the city’s $19 billion in debt with creditors.

“While nobody welcomes the concept of bankruptcy, it is necessary to solve the long-term structural financial challenges of this historic city,” Baruah said in a statement. “This decision puts the city on a path to achieve its most essential function – providing Detroiters the services they deserve – and sets the stage for a growing, vibrant Detroit. The private sector is thriving and businesses continue to invest in Detroit. Addressing Detroit’s financial instability is the final barrier to robust growth.”

Baruah joined other local business leaders who called the city’s bankruptcy an opportunity for a fresh start.

“Today’s Chapter 9 bankruptcy declaration by the City of Detroit is the first step toward a better and brighter tomorrow for our city,” Dan Gilbert, chairman and founder of Quicken Loans, said in a statement. “The financial condition the city finds itself in is years, if not decades, in the making. Bankruptcy will be painful for many individuals and organizations but together we will get through it and come out stronger on the other side.”

Gilbert’s and his affiliated companies now own more than 30 buildings and 7.5 million square feet of real estate in downtown Detroit.

General Motors, which went through its own government-backed bankruptcy in 2009,said it could be a “clean start” for the financially-strapped city.

“GM is proud to call Detroit home and today’s bankruptcy declaration is a day that we and others hoped would not come,” GM said in a statement sent to MLive. “We believe, however, that today also can mark a clean start for the city.”