Blog: Is the Detroit Bankruptcy a Panacea?


We all hope that the Detroit bankruptcy action will somehow alleviate future pain for our city.

To the contrary, the bankruptcy action may only make it more painful for the city in its future endeavors. The city does not need a second bankruptcy proceeding a few years down the road. While there are many issues that have been worked on and addressed, other operational issues must be closely scrutinized.

Many of the debts will be discharged, much to the chagrin of the lenders. Pensioners have obtained a reasonable assurance that they will receive most of their pension payments. The real question is, what will occur with employees in the future?

Will they have pensions? Will employees have the same opportunity to receive pensions by setting aside monies in self-directed pension plans? Will the pay scale be such that the city can live within its means? Will the special interest groups and unions control city activity as has occurred for the last 20-plus years?

Obtaining a bankruptcy discharge will not resolve the underlying issues for the city. Hopefully, the U.S. Bankruptcy Court will recognize that simply dispensing with the case come September will not solve the infrastructure issues that continue to exist.

Alan Ackerman is the managing partner of Ackerman Ackerman and Dynkowski, P.C., a Bloomfield Hills-based eminent domain law firm. He also blogs for