In recent days, it has been reported that the City of Detroit may be next in line for a Chapter 9. The city’s top options are for Michigan Governor Rick R. Snyder to appoint a financial manager, file bankruptcy, or submit to neutral evaluation or mediation. Last week, a review team assembled by state Treasurer Andy Dillon said that all signs point to a Motor City financial emergency. As reported by The Huffington Post on Thursday:
With 700,000 residents, Detroit could become the largest city in American history ever to enter Chapter 9 municipal bankruptcy. But Snyder has stated that he’s reluctant to go down that path.
While the governor has several options under Michigan law for dealing with the city’s financial emergency, a major tug-of-war has revolved around Michigan’s emergency manager law, Public Act 4. The so-called PA4 replaced its predecessor Public Law 72 in 2011 under Snyder’s watch. PA4 was repealed by voters in November 2012. More recently, however, “Republican lawmakers . . . passed a new emergency manager law, known as Public Act 436, which goes into effect March 28 . . . . Much like PA4, the new law vests emergency managers with considerable powers over the municipalities they are appointed to run.”