It Begins: Detroit Neighboring City Of Hamtramck Asks For Permission To File For Bankruptcy

Tyler Durden's picture

From Detroit News:

city of Hamtramck, desperate for cash, has asked the state for
permission to take an unprecedented step: filing for bankruptcy. City
Manager Bill Cooper said the city of roughly 20,000 people is staring
at a $3 million deficit, fueled by a dispute with Detroit. Unless
Hamtramck files for bankruptcy, it won't be able to pay its nearly 100
employees or 153 retirees, he said.

The city sent a letter to the state Department of Treasury last week asking for approval to seek bankruptcy protection. It has not received a reply, Cooper said.

"I'm going to run out of money Jan. 31," Cooper said. Bankruptcy would allow the city wants to stave off creditors and force its unions to consider concessions.

Many Michigan municipalities are under severe financial pressure following a crippling recession that has seen tax revenues plummet. The Detroit Public Schools considered bankruptcy last year but opted against it.

"I'd much rather find another way," Cooper said. "It's not Option 1."

A spokesman for the Department of Treasury said, under state law, a municipality can't file for bankruptcy without first having an emergency financial manager appointed.

Caleb Buhs, a Department of Treasury spokesman, said the department received the letter Monday and officials are studying it. Under a 1990 law, only an emergency financial manager appointed by the state can take a city into bankruptcy, he said. No Michigan municipality has declared bankruptcy before or since the law was passed, he said.

The city of Hamtramck has an annual budget of just under $18 million. A substantial portion of its revenues come from a tax-sharing agreement with Detroit that centers on General Motors' Poletown plant. Detroit has withheld payment for a number of months, arguing that it had overpaid previously. Hamtramck has sued its bigger neighbor, but a court resolution could take months or even longer — not soon enough, Cooper said.

Well, post its IPO, GM should at least make the IPO flippers a little richer. Too bad the city below is not one of them.

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Spalding_Smailes's picture

Detroit has tax/debt/money issues nooooooooooooooooooooooooooooo ..........

Minion's picture

Parasites die if they kill the host.

tip e. canoe's picture

unless they're successful at jumping to another host...think virus.

shortus cynicus's picture

unless they are no more hosts left, in financial terms think about no more 'grather fools'

Fish Gone Bad's picture

You know, I was thinking that things appear to be getting pretty shitty.  I have thought this a few times before, and some how, some way, they pull out a new and clever trick to extend and pretend a little longer.  That town is small potatoes.  California going bankrupt will be the problem no one can seem to fix.  California's financial woes are actually pretty easy to solve compared to the other 49 states in the union.  If anyone in the administration wants to solve it, have Dick Cheney come and visit me. 

MachoMan's picture

spell it like it sounds?

NOTW777's picture

or they serve under the obama umbrella

New_Meat's picture

which is a "grather fool" lol

themosmitsos's picture

Was is Robocop 2 or 3 that I'm think abooot, that involved Detroit?

That guy had a GOOD idea  ;P)

LiquidBrick's picture


The middle cloud looks like a clown smiling with its eyelids closed. Or a bald/old Ronald McDonald.

Time to Short MCD?

Spalding_Smailes's picture

The first one... for $1,000 is being dump'd by fannie Lol'

So the rmbs is marked to what ?Lol'

goldmiddelfinger's picture

There used to be thousands under $1000. Really. In 2008. The mayor has been bulldozing them.

Spalding_Smailes's picture

How is the lake property market ? My uncle had a place on the water 1 block from an apple orchard the area was nice.

waylon153's picture

And the back taxes were unreal.  You could buy 1500-2000 square foot homes for $5-6K but the property taxes would total $20K+.  Entire neighborhoods have been bulldozed due to high unemployment and dilapidated single family residences.  Better to scrape the homes and offer opportunities for developers (commercial or residential) to meet market demands.....

snowball777's picture

You mean like a grocery store that doesn't require a two-bus ride to fucking Grosse Point?

RafterManFMJ's picture

Ah Detroit, returning to farmland and fen; China gets the jobs, CEOs get the sweet bonuses...and the people can begin growing wheat and churning butter.

America has come full circle.

snowball777's picture

When do we start digging the moats?

Feudalism, ho!

tip e. canoe's picture

great observation.   the question is who's gonna own the land as the circle turns once again?

Blano's picture

Bing was going to bulldoze 3,000 a year, so far in 2010 I believe they've only torn down about 500.

I do think a lot of them were sold.  For a couple years the median price in Detroit/Wayne County was ridiculously low.  It's been creeping up the last 6 months to a year.'s picture

i saw my first rolling stone concert in detroit, in the 60's. i remember it well, B I G impact on my life. i sorta did not want to eat meat any more†

i feel really sorry for these people in michigan.

Lucius Cornelius Sulla's picture

Why buy forestland when you can chainsaw a perfectly good home for kindling?

RockyRacoon's picture

A 50 X 100 foot plot makes a perfect garden -- if you can keep the 2-legged varmints out.

Miss Expectations's picture

Check out the last listing for $1.00



samseau's picture


treemagnet's picture

Sooo, GM doesn't pay income or property taxes....where can I get that deal?

vote_libertarian_party's picture

Every city in Illinois is waiting for the State of Illinois to give them their revenue payments.  Months and months behind.  Wait until a couple hundred of them start filing for bankruptcy once the state fesses up about the money will never be sent.

Leo Kolivakis's picture

Detroit and its neighboring cities are utter shitholes! Why in the world anyone would want to live in a place where disgusting fried chicken is considered fine dining is beyond me! (They're all going to get bailed out, even!)

Spalding_Smailes's picture

Leo how bad is your ass bleeding today? Those solars must have been blowtorched ...Lol

Leo Kolivakis's picture


My ass is fine, sold some after earnings, and bought more today. Options expire this week. Do yourself a favor and buy some of these Chinese solars. I'll even spoonfeed you some tickers to keep an eye on: SOL, LDK, TSL, YGE, JASO, and SOLF. If you're not in solars, you're missing the ride of your life! Solar bitchez all the way! LOL!

Spalding_Smailes's picture

Leo easy .....


15 years those will be like gold your right. William Blair thinks the same thing ... a friends dad is a principal /global equity

But China is going down next year, book it. Then I will go all in on China after her market tanks.

Leo Kolivakis's picture

15 years?!? Try 15 months...GOLD!!!!

Spalding_Smailes's picture

What other fields in green energy will china be a leader ? I know they pour'd a ton of cash into this any other tips or thought ?

I had a coal mine i fuck'd up and sold. YZC or something ....

What about India ?

tmosley's picture

They (edit: I mean China here, not India) are excelling in wind turbine technology.  Hell, they even pulled ahead of the West with some of their tech.

Focusing on the sector ignores a lot of structural problems.  While I like China in general, I would rather be starting my own business there than trying to invest in someone else's, especially given that I don't speak the language, know the customs, etc.  It's easy to get bamboozled.  Just like the USA was for a good time period.

Shameful's picture

Big incentive to learn Mandarin :)  Have to agree with Jim Rogers, it's going to be an Asian century.  Though I expect a major crash in China in the coming years and more problems later in this century with their demographics.

Non Passaran's picture

IIRC it will start in as soon as 2015.

New_Meat's picture

sorry tm:

"... excelling in wind turbine technology. ..."

that technology's best is none too good.  We can go back and forth if you'd like.  I go back to "Gossamar Albitross" and U.S. Windpower and Jimmah Cahtah and the fricken DoE subsidies that have failed.

starting a business there?  property rights, and, well, you have the rest.

we just recovered a manufactuing line and placed it back in the U.S.  I'm kinda happy about that.

- Ned

tmosley's picture

I don't really know much about it.  I just ran across it when I was looking for data to refute some fool's assertation that no-one in China had invented anything in the last 1000 years.

But I would definitely prefer to open a new business there than here.  I've played that game here, and it is an utter nightmare, especially if plan to deal with any sort of controlled substance.

New_Meat's picture

good 'nuff, but, from my (very limited) experience, well, kinda' tough to establish a new enterprise when you're not local.

- Ned

tmosley's picture

Not as big of a problem as you would think.  Especially when you know the right people.  A good friend of mine is Chinese, and has offered to help me and several of my friends out with starting a business over there if we ever feel so inclined.  Swoop in, build a business that to produce high-value exports (medical device and pharmaceuticals in my case), preferably in something that can be consumed by the Chinese as well (like my stuff).  $100K in startup costs should build a business that can serve a sizable portion of the world (first export would be permanently antimicrobial bandages that are just as cheap as regular bandages--very useful in low regulation countries).  Profits from one product drive the development cycle of others, and the whole thing builds on itself until my company is recognized around the world.

Not saying their wouldn't be challenges, but I couldn't even think of doing it here.  It would cost millions, and would likely be destined for failure or stymie.

i-dog's picture

China would be ideal for you. In the US you'd run headlong into big pharma (ie. the FDA protection racket).

ColonelCooper's picture

+1 tablet every four hours as needed for rectal bleeding.