The largest municipal bankruptcy in history isn’t all about the financial claims of global banks and the thousands of pensioners who are justifiably making headlines in recent days.
A handful of individuals whose lives sometimes were severely disrupted or perhaps ruined by city-related activities are now considered “unsecured creditors” by terms of Detroit’s Chapter 9 filing. These people were litigating their civil rights cases against the city when the bankruptcy filing halted those procedures.
Their claims may not be on billion-dollar deals, but they are part of the bankruptcy conversation. Their stories illustrate the complexities of Detroit’s insolvency case. They serve as a bold reminder of the potential that municipalities, their employees and their actions have to dramatically affect lives, for better or for worse, in everyday operations.
One example in this “creditor class” is Walter Swift, who through his attorneys filed an objection on Tuesday to the city’s Disclosure Statement, the document outlining how the city will restructure its debt as it eventually exits from Chapter 9.
Full disclosure: I met Walter in a previous life when I wrote for Metro Times, Detroit’s alternative newspaper. (I even talked about him with Craig Fahle on WDET.) Swift, an admitted drug user and less than model citizen, was convicted of sexual assault in 1982. Twenty-six years later, the national Innocence Project helped clear him, and he was released from prison.
Since then, he’s struggled. I’ve followed his saga, admittedly from the sidelines, but I’ve known he’s been in and out of rehab and jail. Funds raised after his release are spent. He sometimes struggles to stay alive.
Because of a lab technician’s error and withheld evidence, according to his lawsuit and case file, years of his life were stolen, including his inability to right his own course. While some wrongly convicted people say prison gives them a new start and they emerge to healthy, productive lives when freed, Walter didn’t have that experience. He came out with little promise for his own future. He did, however, have the strength of his claim against a city whose law enforcement department’s errors arguably committed its own crime in his investigation and prosecution.
Swift sued the city in 2012 in U.S. District Court. That lawsuit is now lumped in with all “unsecured creditors,” and Swift’s litigation is on hold pending bankruptcy court action.
The man with the drug problem, arrest records and questionable personal future isn’t exactly the most sympathetic of “creditors,” but the city’s role in creating that life for him isn’t being explored.
So while bond insurer attorneys from around the country clog the court docket with massive subpoenas for centuries of records, the intricacies of the future governance of pensions boards and museums are sketched, and individual ballots for thousands of pensioners are printed and mailed reflecting their city payments, Swift’s relatively simple claim languishes.
One interpretation of a bankruptcy filing is that it allows leadership and the courts to remedy financial sins of the past. How will civil rights be credited?
-By WDET’s Sandra Svoboda
@WDETSandra and email@example.com