18 July 2018

Five Years Ago Today ...

... Detroit filed for Chapter 9 bankruptcy. I blogged about the case nearly interminable (go here for one of the last) and wrote an article about it, Who Bears the Burden? The Place of Municipal Residents in Chapter 9 (download here or here). 

All seems to be going reasonably well in Motown nowadays which is due in part to the successful adjustment of its debts in Chapter 9. A formal, legal mechanism by which debts can be adjusted (or reorganized, in the case of Chapter 11) is crucial for entities in a market economy. The whole of an enterprise is often worth more than its parts but the value of that whole cannot be realized without a means of forcing holdouts to participate and binding each for the sake of all.

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