The Detroit Bankruptcy Is Causing Governments Across Michigan To Cancel Fundraising Plans
REUTERS/Rebecca CookA large "Opportunity Made In Detroit" banner is seen on the side of one of the buildings owned by Quicken Loans founder Dan Gilbert in downtown Detroit, Michigan January 30, 2013. Gilbert has a vision for downtown Detroit that many would find hard to square with the long, painful decline commonly associated with this city: a vibrant urban core full of creative, innovative and talented young people. Yet Quicken Loans, the mortgage lender Gilbert co-founded in 1985, has invested $1 billion over three years, bought some 2.6 million square feet of commercial space in the downtown area and moved 7,000 employees there in a bid to make that vision a reality. Picture taken January 30, 2013.SAGINAW, Mich. (AP) — Three governments in Michigan have pulled planned municipal bond sales off the market since Detroit filed for bankruptcy protection last month.
On Thursday, Saginaw County withdrew a roughly $61 million sale to cover pension obligations. Ahead of that decision, Genesee County withdrew a $54 million sale to finance a water and sewer work. And Battle Creek delayed a $16 million general obligation bond issue.
The decisions come amid concern that Detroit's bankruptcy will make it more difficult for communities to borrow money.
Detroit owes billions to bondholders and billions more in pensions to retired city workers. In its bankruptcy filing, the city proposed trimming pension benefits and paying bondholders a fraction of what they're owed. It also wants to treat retired city workers and bond investors as equals.
Copyright (2013) Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.