Click amount to donate direct to CounterPunch
  • $25
  • $50
  • $100
  • $500
  • $other
  • use PayPal
Keep CounterPunch ad free. Support our annual fund drive today!

Selling Out Detroit


On Thursday, January 16, 2014 in the Detroit federal bankruptcy court, Judge Steven Rhodes issued a decision that promises a measure of justice in the face of Wall Street banks’ toxic threat that they are supposedly “too big to fail” (or jail).

Judge Rhodes denied payments of over $169 million to Bank of America/ Merrill Lynch (BAML) and UBS.   The motion to pay the banks was filed by Jones Day lawyers, supposedly representing Detroit and working in our best interest.  The judge’s decision against the payment proves otherwise.

BAML and UBS were among the Wall Street predators whose massive frauds caused the housing crisis, the economic crash of 2008, Detroit’s unprecedented neighborhood vacancies and blight after they drove People out of their homes, and the city’s financial crisis because of the resulting losses of tax revenue.  They are also clients of the giant Jones Day law firm.

Kevyn Orr was a senior partner with Jones Day, until the very day Governor Snyder made him Detroit’s one-man local government under Snyder’s emergency management statutes.  Jones Day sought a lucrative contract as Detroit’s “restructuring counsel” because for them this civic disaster is a business development opportunity.  Then they filed Detroit’s Chapter 9 municipal bankruptcy.  The implications of the January 16 ruling are truly extraordinary.

Indeed, this was the second time Judge Rhodes told Jones Day’s $1,000 per hour lawyers and Orr not to pay BAML and UBS their claimed “termination fees” for toxic interest rate “swaps” – predatory Wall Street instruments of financial destruction.  The first time Orr and Jones Day wanted to pay them over $230 million!  That money would have come out of the shares of hard-working and by no means wealthy Detroit retirees as well as city services for residents.


Jones Day lawyers arriving at court on the day of the bankruptcy filing, led by David G. Heiman (2nd from left).

Instead of rewarding the Jones Day bankster clients for their predatory misconduct, Judge Rhodes’ order as a practical matter rendered their claims “unsecured” like others in bankruptcy.

But the more significant immediate issue is that this seems to be the final proof that Jones Day and Orr do not really represent the best interests of Detroit or its People.  What does it say about these lawyers and the one-man “emergency” local government forced on us by Governor Snyder, that they have now twice been told by the bankruptcy judge they improperly tried to sell us out to their other clients for hundreds of millions of dollars?  After being denied once by the court, they went into a back room on Christmas Eve 2013 and tried to do it again!

As this long-running neoliberal racist extravaganza churns into February and beyond, Orr has recently: 1) issued a top-secret first draft ‘plan of adjustment’ to creditors; 2) filed a massive suit against the Detroit retirement systems and ‘service organizations’ created to facilitate the fraudulent ‘swaps;’ and 3) is reportedly now trying to work out yet another deal with BAML and UBS for their end of the scam.  If no deal is reached, more litigation is said to be possible.  The price may be declining, but the Jones Day policy of selling out Detroit to their bankster clients remains the same.


Protestors gathering on October 23rd outside the Detroit Federal Courthouse.

Detroiters have the basic right to competent and loyal legal representation, as well as democratically accountable local government, as we proceed through the largest municipal bankruptcy case in U.S. history.  Jones Day and Orr are mercenaries plagued by conflicts of interest, who have repeatedly demonstrated their lack of candor, integrity and faithfulness to our interests.  They should be fired and replaced by competent professionals who are in a position to truly represent Detroit.

Judge Rhodes’ decisions undermine the legitimacy of Wall Street’s claims on Detroit’s assets.  Cancellation of the debt allegedly “owed” to the banks by Detroit, not merely moving it into an unsecured position, should become part of the public dialogue over the future of Detroit.

As the plan of adjustment is made public, and Detroiters from all walks of life engage more directly and militantly with the unjust pillage and dictatorship forced on us by Snyder, these bungled attempts to address the crisis are creating new opportunities for us to build a new city.  We need a different approach from the bail-out-Wall-Street-at-all-costs policy of Snyder and Jones Day.  Everyone agrees things need to change.  Detroiters are coming together with our neighbors to resist this abuse and help make our city work for us.     

Tom Stephens is a coordinator of the communications working group of Detroiters Resisting Emergency Management (D-REM).  Their web site is at:

Tom Stephens is a coordinator of the communications working group of Detroiters Resisting Emergency Management (D-REM).  Their web site is at:

More articles by:

2016 Fund Drive
Smart. Fierce. Uncompromised. Support CounterPunch Now!

  • cp-store
  • donate paypal

CounterPunch Magazine


Weekend Edition
October 21, 2016
Friday - Sunday
John Wight
Hillary Clinton and the Brutal Murder of Gaddafi
Diana Johnstone
Hillary Clinton’s Strategic Ambition in a Nutshell
Jeffrey St. Clair
Roaming Charges: Trump’s Naked and Hillary’s Dead
John W. Whitehead
American Psycho: Sex, Lies and Politics Add Up to a Terrifying Election Season
Stephen Cooper
Hell on Earth in Alabama: Inside Holman Prison
Patrick Cockburn
13 Years of War: Mosul’s Frightening and Uncertain Future
Rob Urie
Name the Dangerous Candidate
Pepe Escobar
The Aleppo / Mosul Riddle
David Rosen
The War on Drugs is a Racket
Sami Siegelbaum
Once More, the Value of the Humanities
Cathy Breen
“Today Is One of the Heaviest Days of My Life”
Neve Gordon
Israel’s Boycott Hypocrisy
Mark Hand
Of Pipelines and Protest Pens: When the Press Loses Its Shield
Victor Wallis
On the Stealing of U.S. Elections
Michael Hudson
The Return of the Repressed Critique of Rentiers: Veblen in the 21st century Rentier Capitalism
Brian Cloughley
Drumbeats of Anti-Russia Confrontation From Washington to London
Howard Lisnoff
Still Licking Our Wounds and Hoping for Change
Brian Gruber
Iraq: There Is No State
Peter Lee
Trump: We Wish the Problem Was Fascism
Stanley L. Cohen
Equality and Justice for All, It Seems, But Palestinians
Steve Early
In Bay Area Refinery Town: Berniecrats & Clintonites Clash Over Rent Control
Kristine Mattis
All Solutions are Inadequate: Why It Doesn’t Matter If Politicians Mention Climate Change
Peter Linebaugh
Ron Suny and the Marxist Commune: a Note
Andre Vltchek
Sudan, Africa and the Mosaic of Horrors
Keith Binkly
The Russians Have Been Hacking Us For Years, Why Is It a Crisis Now?
Jonathan Cook
Adam Curtis: Another Manager of Perceptions
Ted Dace
The Fall
Sheldon Richman
Come and See the Anarchy Inherent in the System
Susana Hurlich
Hurricane Matthew: an Overview of the Damages in Cuba
Dave Lindorff
Screwing With and Screwing the Elderly and Disabled
Chandra Muzaffar
Cuba: Rejecting Sanctions, Sending a Message
Dennis Kucinich
War or Peace?
Joseph Natoli
Seething Anger in the Post-2016 Election Season
Jack Rasmus
Behind The 3rd US Presidential Debate—What’s Coming in 2017
Ron Jacobs
A Theory of Despair?
Gilbert Mercier
Globalist Clinton: Clear and Present Danger to World Peace
James A Haught
Many Struggles Won Religious Freedom
Kollibri terre Sonnenblume
Dear Fellow Gen Xers: Let’s Step Aside for the Millennials
Uri Avnery
The Peres Funeral Ruckus
Tom Clifford
Duterte’s Gambit: the Philippines’s Pivot to China
Reyes Mata III
Scaling Camelot’s Walls: an Essay Regarding Donald Trump
Raouf Halaby
Away from the Fray: From Election Frenzy to an Interlude in Paradise
James McEnteer
Art of the Feel
David Yearsley
Trump and Hitchcock in the Age of Conspiracies
Charles R. Larson
Review: Sjón’s “Moonstone: the Boy Who Never Was”