Detroit Files for Chapter 9 Bankruptcy
On Thursday, July 18, Detroit filed the largest municipal bankruptcy in U.S. history, leaving $18 to $20 billion owed to creditors hanging in the balance. As Michigan Governor Rick Snyder approved city manager Kevyn Orr’s decision to file bankruptcy, he said, “I’m making this tough decision so the people of Detroit will have the basic services they deserve and so we can start to put Detroit on a solid financial footing that will allow it to grow and prosper in the future.” City pension funds embroiled in lawsuits with the city are likely to challenge the bankruptcy filing.
An automatic stay has been placed on most of Detroit’s outgoing bills and lawsuits while the city proves its insolvency to a bankruptcy judge. Once the city proves its insolvency, Orr will attempt to earn creditors’ support of a reorganization plan that includes budget cuts, asset sales, renegotiated union contracts, and layoffs.
To be sure, the city does not have an easy road to bankruptcy. One Michigan judge has already ruled that the city’s bankruptcy filing is unconstitutional because it will undoubtedly reduce the benefits of over 30,000 current and former city employees. “Plaintiffs shouldn’t have been blindsided,” Judge Rosemarie Aquilina said about the city’s decision to file bankruptcy five minutes before a scheduled court appearance. Michigan’s attorney general vowed to appeal the ruling.
Israel and Palestine Close to Entering Direct Negotiations
U.S. Secretary of State John Kerry said that an agreement that would lead to Israel and Palestine resuming direct negotiations is in the process of being formalized. After meeting with Palestinian President Mahmoud Abbas and Israeli Prime Minister Benjamin Netanyahu, he told reporters, “We have reached an agreement that establishes a basis for resuming direct final status negotiations between the Palestinians and the Israelis. The agreement is still in the process of being formalised.”
In a press conference after his meetings with the two leaders, Kerry said, “Through hard and deliberate work, we have been able to narrow those gaps very significantly. We continue to get closer and I continue to be hopeful that the two sides will come to sit at the same table.” The Arab League issued a statement expressing its support for Kerry’s proposals, but qualified that “any future deal must be based on a two-state solution and through establishing an independent Palestinian state on the 4 June 1967 borders with a limited exchange of lands in the same value and size.”
Two-party talks will likely center around the release of 100 long-term prisoners, a moratorium on Israeli settlement construction, and an independent Palestinian state based on the 1967 borders. While Netanyahu has expressed reserved support for the release of the prisoners and a limited freeze on settlement construction, the Palestinians’ insistence on an independent state based on the 1967 borders is likely to be a major sticking point.
U.S. Court Orders Journalist to Testify Against Source
On Friday, a federal appeals court ruled that James Risen, a reporter for The New York Times, must testify against a Central Intelligence Agency employee who provided him with classified information. In his opinion, Chief Judge William Byrd Traxler, Jr. wrote, “Clearly, Risen’s direct, firsthand account of the criminal conduct indicted by the grand jury cannot be obtained by alternative means, as Risen is without dispute the only witness who can offer this critical testimony.”
Joel Kurtzberg, Risen’s attorney, was quick to point out that this ruling comes on the heels of Eric Holder’s new guidelines for leak investigations: “The DOJ’s recent change of position is nothing less than an admission that the legal standard it asks this court to apply provides wholly inadequate protection for the interests at stake in this case.”
Russian Opposition Leader Freed
The Russian government released Aleksei Navalny, one of its most vocal critics, from prison on Friday. Navalny, the leader of the Russian opposition party, was convicted of embezzlement on Thursday.
Officials cited Navalny’s candidacy for mayor of Moscow as the primary reason for his release, but supporters claim that protests in Moscow’s Manezh Square pressured officials to release him. On his release, Navalny said, “It’s some kind of an awkward moment, when the only ones released upon the prosecutor are you and other prosecutors who have been protecting underground casinos. Nothing like this has happened to anyone else.”
Obama Comments on Zimmerman Verdict
“Trayvon Martin could have been me 35 years ago,” U.S. President Barack Obama said in his first public comments about Martin’s death since George Zimmerman was acquitted. Obama questioned the efficacy and wisdom of “stand your ground” laws, asking, “Do we actually think that he would have been justified in shooting Mr. Zimmerman, who had followed him in a car, because he felt threatened? And if the answer to that question is at least ambiguous, it seems to me that we might want to examine those kinds of laws.”
In response to Obama’s comments, George Zimmerman’s brother Robert said that he was glad the president spoke out today, adding, “I think the president was speaking off the cuff, and I think he was very sincere in his remarks. My concern is that … we do everything we can for children who are having difficulties — and I really see eye to eye with the president on that — difficulties in life.”
Weekend Read: Jahar’s World
How did a “beautiful, tousle-haired boy with a gentle demeanor, soulful brown eyes and the kind of shy, laid-back manner that ‘made him that dude you could always just vibe with’” help orchestrate and execute the Boston Marathon bombings? Janet Reitman of Rolling Stone reports.