Over the last week the bankruptcy judge hearing the City of Detroit’s case has been taking testimony in order to decide if the municipal bankruptcy filed by Detroit's emergency manager Kevyn Orr meets the Chapter 9 bankruptcy statute's requirement that BEFORE filing bankruptcy the emergency manager must make "good faith" efforts to avoid the bankruptcy. 

One revelation during the hearings is that Kevyn Orr is not paid by the City of Detroit or by the State of Michigan.   Kevyn Orr was being paid by a private fund controlled by Governor Synder.   The names of the “donors” to this private fund are secret.

Something is very wrong with this picture.

I predict that the bankruptcy judge will find that the bankruptcy filing by Orr is void – because the filing was pre-meditated and there was no good faith effort to avoid the bankruptcy.

Kevyn Orr is a Jones Day attorney.  

There is about 20 billion dollars at stake in the Detroit bankruptcy – who will be paid and who will take a hit?

Will the banks and the credit default swap folks get back 90% of their money while the Detroit retirees get pennies? 

Who will be blowing in the ear of Jones Day?  Little retirees from Detroit? Or the banks? and financial snakes?

Read more in the Detroit Free Press here.

 Just because a city is broke doesn't mean it doesn't pay to be in the bankruptcy end of the legal trade.   There is always money for counsel in a bankruptcy - that's the way bankruptcy legislation is written.   And the bankruptcy code is esoteric, so you need really experienced, skilled, dedicated folks to navigate for the municipality.   Right?

Prior to July, 2013 David Heiman, a partner in the Cleveland Jones Day office billed153 hours  at  ($976 per hour) for a total billing for that time period of $149,419.00.    Read more about the costs of Detroit's bankrupcy counsel here at Deadline Detroit.

If the bankrupcy judge determines that Kevyn Orr, guided by Jones Day, failed to exercise good faith towards resolution prior to filing bankruptcy, would it be reasonable to request counsel return all their fees?

 Read this Detroit Free Press article - uncanny how many corruption similarities there are between Ms. Fox's experiences and those of similarly situated folks here in Cleveland, Ohio.  

Just consider the players - fast track land bank, Downtown Partnership, airport corruption, FBI investigation, interlocked board members,  on and on...

 It is a clear conflict of emergency manager Kevyn Orr to have hired Jones Day, the law  firm from which he just resigned to take the emergency manager job - to be the City of Detroit's bankrupcty counsel.  

Governor Snyder and his NERD fund appear to have set up a bag job.

Read testimony from the trial before Judge Steven Rhodes here at Detroit News Special Projects Blog 

Following is a quote from the World Socialist Web site report on the trial before Judge Steven Rhodes:

 "As in previous days, Orr frequently stated “I don’t know” to and “I don’t recall” and offered evasive responses during his testimony. In one instance, Orr claimed he did not remember whether he had asked Governor Rick Snyder for state funds to preserve Detroit pensions, at which point Judge Steven Rhodes replied incredulously, “You don’t remember asking the governor to write a check for $3.5 billion dollars?”

Mr. Orr, pursuant to the bankruptcy code - must show he made a good faith effort to negociate prior to bankrupcy in an effort to avoid filing bankruptcy.   

Without asking the Governor, and the State , to help bail out Detroit, Mr. Orr has failed the "good faith" avoidance test.

The Judge's question: “You don’t remember asking the governor to write a check for $3.5 billion dollars?” is critical.