Michigan Gov. Rick Snyder is expected to make two major announcements Thursday: that the state is taking over Detroit’s finances and that a Washington lawyer is going to lead to restructuring.
The announcements would put an end to months of debate about Detroit’s failing, bankrupted budgets. Reuters says Mr. Snyder is “highly likely” to name lawyer Kevyn Orr, 54, a partner in the Jones Day firm, to lead the takeover, during a scheduled 2 p.m. press conference.
Mr. Orr worked on the restructuring of Chrysler after that company filed for bankruptcy in 2009, Reuters reported. In the first year of the case alone, he took home $1 million in fees. But that case isn’t his only Michigan tie: Mr. Orr graduated from the University of Michigan — and on top of that, he’s black, which could bring him leverage with politicians in a city in which 83 percent are also black, Reuters says.
Detroit has been operating at a deficit for nearly 10 years and is listed as the poorest of major cities in the nation, Reuters says. The city’s unemployment rate sits above 18 percent, and city budgets can’t even pay for fully staffed police protection.
Scandal and corruption also plague the city.
Kwame Kilpatrick, Detroit’s mayor from 2001 to 2008, was convicted on Monday on two dozen federal corruption and bribery charges, for which he faces up to 20 years in prison.
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