In Detroit, Testimony and Anger Over Bankruptcy Filing

Emergency manager Kevyn Orr testified in court that it was necessary for Detroit to file bankruptcy, although many politicians and activists disagree.

Posted: 10/29/2013 03:25 PM EDT

Detroit's emergency manager Kevyn Orr (Photo: Bill Pugliano/Getty Images)

In Detroit, the last few days have been filled with state officials and others revisiting the decision that placed the city in bankruptcy this past summer.

The latest chapter in the crisis has been playing out in a U.S. bankruptcy court, where there is currently a trial to determine whether Detroit met federal requirement rules when it filed for bankruptcy protection. The trial has produced testimony from Michigan’s Republican governor, Rick Snyder, and Kevyn Orr, the man he appointed to serve as the emergency manager over Detroit’s crippling finances.

For many of the city's officials and community activists, there is a feeling that the decision to file was set in place even before Orr was first appointed in July and that Snyder had a long-term strategy of slashing retiree and health benefits of longtime city workers in order to improve Detroit’s finances.

“This is being done as a way of making some profound changes in the city of Detroit,” said John Olumba, a member of the Michigan House of Representatives who ran unsuccessfully for mayor earlier this year.

“Detroit is saddled with a lot of bad debt, and now the city is majority Black and people don’t have resources,” Olumba said, in interview with BET.com.

“But there are people with resources who see Detroit as a place that can be gentrified. And that’s what’s going on here," he added. "And bankruptcy allows them to do that and not have to deal with the financial liabilities of the city. This was the plan from the beginning.”

While that is a prevailing sentiment among many leaders in Detroit, the governor insisted in his testimony that the bankruptcy filing was justified and that nothing prevented Orr from making that decision legally.

"I believe I am following the constitution and the constitution of the United States, which treat pensions as a contractual obligation," Snyder said, in his testimony.

Snyder also said there had been no prearranged plan to push the city of Detroit into bankruptcy before the filing. He said that the decision was acted upon after Orr had reached the conclusion that it was the right move for Detroit.

"Bankruptcy's a very last resort," Snyder said. "These actions showed there wasn't a meeting of the mind that there was not going to be a mutual understanding here to resolve this short of bankruptcy."

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