Michigan city, seeking bankruptcy, could be first of many

Gus Lubin, Business Insider ·

The City of Hamtramck, Mich. is seeking state permission to declare bankruptcy, according to The Detroit News. City Manager Bill Cooper says he's going to run out of money on January 31:

Unless Hamtramck gets bankruptcy protection, Cooper said it won't be able to pay its nearly 100 employees or the pensions of its 153 retirees who consume nearly a third of the city's US$18 million budget.

Hamtramck would be the first Michigan municipality to declare bankruptcy. It could be the first of many: "There're lots of towns in trouble," Cooper said.

Hamtramck wouldn't even have this trouble if it wasn't squabbling with near-bankrupt Detroit over tax money. The city has sued Detroit for withholding shared tax revenue from the GM Poletown plant, which Detroit says it had overpaid previously.