Detroit's Forgotten Creditors

These creditors stand to become casualties of the city of Detroit twice over, through no fault of their own and with little means to do anything about it.

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  1. Detroit’s bankruptcy may seem like well-trodden story, but we actually know little about how the crisis affects the city’s poorest and most vulnerable.
  2. I conducted a five-month investigation —poring through documents, wrangling hard-to-get interviews, studying up on bankruptcy law—and discovered that individuals with judgments from lawsuits against the city had been systematically excluded from negotiations between the city and its creditors. As a result, more than 500 of them – with claims ranging police abuse to wrongful death – are getting the smallest rate of return of any creditor in the bankruptcy: less than one fifth of what they are owed, payable over 30 years.
  3. That means that people like Jessie Payne — a 72-year-old woman who was run over by a Detroit city bus and was awarded damages in court — and Dwayne Provience, who spent nearly a decade in jail for a murder he didn’t commit, will get only one-fifth of any compensation due to him. Yet at the same time, wealthier litigants and collective bargaining organizations will receive much higher rates of return, some of them as much as 95 percent.
  4. The outcome in Detroit sets precedent for other cities facing similarly crippling debts. And what ultimately happens to Jessie Payne and Dwayne Provience in Detroit could happen to others.
  5. The Forgotten Creditors of Detroit
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