Detroit Resurrected: To Bankruptcy and Back by Nathan Bomey details the inside story of Detroit's bankruptcy filing. $18 billion in debt and six decades of mismanagement and dereliction of duty, Detroit's once iconic status was reduced to a city without funds; every other street light broken, trash missed, water and sewer inconsistent. A city of 700,000 people that miraculously could not function. The solution to Detroit's grave issues was a reset button: bankruptcy. This book highlights how unlikely partners - a Republican technocratic governor, a private bankruptcy lawyer who left his firm to become an appointed emergency manager, and two judges - led the fight to save Detroit with the help of residents, philanthropic institutions, mediators, and more. Saving Detroit and rebuilding its legacy was a herculean effort and achievement.
In the fight to save Detroit, pensioners who had earned their retirement, union works, and the Detroit Institute for the Arts (a crown jewel) all experienced moments of existential crisis. It was a tense and monumental deal that took almost 1.5 years to complete, far faster than the average municipal bankruptcy. The mismanagement of Detroit retiree's pensions included undue bonuses, bribes for investment choices that did not pay dividends, and a true lack of accounting. One retiree should have had his total investment equal around $400,000 when he retied. But after years of excess annuity interests, he received $1.4M when he retired (p72). Rather than accounting for each pensions, its owed money, and then reinvesting the rest in the city, it was distributed unevenly and irresponsibly so much so that pensioners of today lost money to prior pensioners.
Clearly, Detroit got back on track. It took creative solutions, steadfast commitment to agreements, and, frankly, deprioritizing creditors during a global recession. Detroit was resurrected by bipartisan, bold leadership.
This was a fascinating book- I definitely want to go to Detroit now!