Bankruptcy ‘Not An Option’ For Detroit Suburb: Mich.

Law360, New York (November 18, 2010, 1:34 PM EST) -- Michigan's Department of Treasury said Thursday that the Detroit suburb of Hamtramck, mired in a multimillion-dollar contract dispute with Detroit over tax payments tied to a General Motors Co. plant, would not be allowed under state law to file for bankruptcy.

"Bankruptcy is not an option for a municipality in Michigan," Treasury spokesman Caleb Buhs said Thursday, explaining that, under Michigan Public Act 72, the city would instead be required to enter into a status akin to receivership.

According to Michigan law, if Hamtramck declares a...
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