Detroit school district weighs pros and cons of filing for bankruptcy
Jul 1, 2009 1:11 PM
From The Detroit News: Detroit Public Schools officials say a Chapter 9 bankruptcy filing is one of many options being considered to address its multi-year deficit, but questions remain on how much such a filing would cost and whether the district would reap adequate benefits. Michigan Department of Education officials say a Chapter 9 filing, which is available for municipalities, would be unprecedented in the state. Robert Bobb, the district's emergency financial manager, floated the possibility during a budget presentation Monday. Bobb called bankruptcy a "last resort," but says the district met with attorneys last week to explore the ramifications.
JUNE 2009...from The Detroit Free Press: The
state-appointed emergency financial manager for the Detroit Public Schools says the district's budget is the worst he's ever seen.
Robert Bobb says he is
considering other measures to address the crisis -- including filing
for bankruptcy. Bobb's budget calls for increasing the number of
layoffs from 1,766 to
2,451, larger high school class sizes and other cuts that could include
unpaid furloughs and benefit reductions, according to the 2009-10 draft
budget.
ALSO...from The Detroit News: Bobb says the district has overspent its budget for seven years and that eliminating the deficit in one year would be too harmful to students.
Earlier from The Detroit News: The Detroit school district is projecting enrollment will drop to under 84,000 students and it is cutting more than 1,700 employees -- nearly 13 percent of the work force -- to reduce the school system's massive multiyear deficit. The enrollment would bring the district's student population to numbers not seen here since around World War I.
