Who knew? Detroit is planning on being a trend setter in this regard…

A decision on whether to file for protection under federal bankruptcy laws will be by the end of the northern summer, according to Robert Bobb, Detroit Puablic Schools’ emergency financial manager. Such a filing would be unprecedented.But in Detroit — where US Education Secretary Arne Duncan dubbed the school system a “national disgrace” — politicians and bankruptcy experts see few alternatives, given the deep financial challenges confronting the district and the state.

Having a guy with two first names (and the same no less) in charge is probably a bad sign, but I digress.

Anyway, there’s a special Chapter of the Bankruptcy code, Chapter 9, for public entities.

And even though Detroit started it, expect more…

Some experts say the Detroit case could be the first in a string of Chapter 9 bankruptcies among school districts and other public entities battered by the economic crisis, and it could help shape that area of the law.

Great.

via the Hot Air GreenRoom, where Mitch Berg draws a parallel…

The Detroit Public Schools are pondering bankruptcy, swamped by (let me know if any of this sounds familiar) the combination of lowered demand for their product and mushrooming expenses, including pensions for long-retired employees:

Read it.