Philip Dublin Pens Third Article for WSJ: Lessons from Detroit’s Bankruptcy
For his third article in a series being published by The Wall Street Journal’s Bankruptcy Beat blog, Akin Gump financial restructuring partner Philip Dublin shares lessons learned from Detroit’s bankruptcy that can be of use of troubled cities nationwide.
Dublin notes that he worked on an auto supplier’s chapter 11 case from 2005 to 2007 and, as a consequence, spent significant amounts of time in Detroit. He sees the city’s chapter 9 case, spurred by the 2008 financial crisis, as a model for state and municipal leaders to study in order to recognize when a city’s “fiscal foundation is failing and corrective measures are needed.”
He stresses the need for state leaders to pay attention to their municipalities in order to “recognize the early signs of financial crisis and be proactive with aid and policy measures to steer their cities away from the type of challenges faced by Detroit.” He also spotlights education, particularly at the local level, of leaders in order that they recognize the warning signs of financial trouble and “insist on advancing with the times, obtaining necessary technology and learning how to teach those that implement policy to ensure that the ship they pilot does not become rudderless.”
Dublin closes by stressing the importance of investment in a city’s future by its residents and through outside traditional investors in order to provide this education. He also notes that city leaders “must be just as knowledgeable and sophisticated” as institutional investors or investment funds in order to be able to access capital from these sources.
To read summaries of Philip Dublin’s previous articles, click here for “WSJ Publishes Second Philip Dublin Article, Focus on Delaware Rural/Metro Ruling” and here for “WSJ Publishes Phil Dublin Piece on the Future of Corporate Restructuring.”