Catching up on Detroit’s bankruptcy news…and Puerto Rico’s

Catching up on Detroit’s bankruptcy news…and Puerto Rico’s

Detroit’s blight

The Detroit Land Bank Authority will receive nearly $12 million from the city’s general fund, following a split City Council vote last week. Land bank officials say they needed the monies to operate and continue demolition of vacant and abandoned properties.

The council also transferred nearly 38,000 city-owned residential properties to the Land Bank, which seeks to put them back into productive use or clear them.

The Detroit News reported:

Council President Brenda Jones, who along with members Raquel Castaneda-Lopez and Janee Ayers voted against the subsidy, said she’s reluctant to take on the financial responsibility.

Detroit, she said, is operating under the oversight of a Financial Review Commission that will go away if officials budget responsibly and avoid deficits for three years.

“My concern is this; we just emerged from a bankruptcy,” Jones said. “The city looks pretty good. I don’t want a deficit to occur in three years because the city is going to be responsible for what the land bank does if the land bank doesn’t have any money.”

The city’s blight was a major issue of the bankruptcy case, with several city officials testifying it was one of the top concerns as they looked to revitalize Detroit.

Orr’s pay in Atlantic City

Former Detroit Emergency Manager Kevyn Orr collected a higher hourly wage in his consulting role in Atlantic City than most of the attorneys who worked on the Detroit bankruptcy case, according to published reports.

Orr, who was appointed by New Jersey Gov. Chris Christie as a consultant for the financially challenged casino town, charged $950 an hour during his three months of work. His total collected: about $70,000, the Press of Atlantic City reports.

Bankruptcy watchers have sights on Puerto Rico

Like Detroit did two years ago, the sunny island of Puerto Rico is facing a debt crisis: $73 billion owed to financial creditors, NPR reports. With four times the debt that purged Detroit into bankruptcy, the sunny paradise destination is looking for any solution out.

With a junk status rating, Puerto Rico is trying to negotiate a new bond sale with Wall Street investors. At the same time, the island’s troubled energy company, PREPA, is desperately trying to stave off default. … To deal with its debt, Puerto Rico passed a law that would allow troubled agencies like the state-owned power company to seek bankruptcy protection. A federal judge struck down the law, though, ruling it violated the federal Bankruptcy Code. The commonwealth is appealing that decision. It’s also pushing for a law in Congress to amend the Bankruptcy Code to include Puerto Rico. In the meantime, the island needs to find money to pay its creditors. And that means raising taxes.