Detroit schools' emergency manager considering Chapter 9 bankruptcy

By Caroline Salls

Pittsburgh, Aug. 19 - The School District of the City of Detroit's emergency financial manager is evaluating the pros and cons of a possible Chapter 9 bankruptcy filing for the district, according to a notice released Wednesday.

Emergency financial manager Robert C. Bobb said he is evaluating every option available to him, including his power to authorize the bankruptcy filing.

Bobb said he is considering the bankruptcy option in connection with the impact on labor negotiations.

The manager would only authorize the bankruptcy filing if he feels that there is no feasible alternative for the district, the notice said.

The district said its employment costs represent about 80% of its general fund expenditures.

According to the notice, state officials decided in the fall of 2008 that a financial emergency existed in the district. Bobb was appointed in March to assume control of the district's finances.

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