Detroit Bankruptcy Detroit Files Largest Municipal Bankruptcy In Hist
Detroit has filed for bankruptcy, the AP's Ken Thomas reports. Here's the full filing »
"Right now, the City cannot meet its basic obligations to its citizens," Gov. Rick Snyder, who signed off on the filing, said in the petition. "Right now, the City cannot meet its obligations to creditors."
The move proved inevitable after two municipal pension funds sued city emergency manager Kevyn Orr.
It's the largest municipal bankruptcy in U.S. history, dwarfing Jefferson County, Ala.'s $3.1 billion sewage district restructuring.
In June 2012, the City of Stockton became the largest-ever city to file for bankruptcy.
Here's our full list of the largest state takeovers in U.S. history »
The Motor City faces $20 billion of long-term liabilities. The Wall Street Journal's Matt Dillon says those holding onto $11 billion in unsecured debt are basically staring into the abyss, facing the prospect of getting next to nothing from the city's obligations.
The pension funds want to block Orr's attempt to drastically reduce the amount of benefits owed to current and former city workers.
The funds are fully aware that they could still face such cuts even if the city is forced to go to court, but say they'd prefer to fight the cuts there. Here's the Freep's cut from their suit:
It appears imminent the governor will grant the emergency manager the unconditional power to proceed under Chapter 9 (bankruptcy) and the emergency manager will seek to have the city’s pension debts impaired pursuant to Chapter 9 unless the retirement systems and their participants accept the emergency manager’s unilateral imposition of significant impairments to their accrued financial benefits.
Detroit News' Robert Snell Tweets the city has listed more than 100,000 creditors.
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Detroit Chapter 9 Bankruptcy Filing - WXYZ by webteam2410
Detroit files for bankruptcy
Detroit files for bankruptcy
CAPTIONS Blighted home in Detroit
Illegally dumped tires sit in front of a vacant, blighted home in a once thriving neighborhood in Detroit. (Reuters photo /July 18, 2013)
By Nick CareyReuters3:49 p.m. CDT, July 18, 2013
The city of Detroit filed for bankruptcy on Thursday, making it the largest-ever municipal bankruptcy in U.S. history and marking a new low for a city that was the cradle of the U.S. automotive industry.
In a letter accompanying the filing, Michigan's Governor Rick Snyder said he had approved a request from Detroit Emergency Manager Kevyn Orr to file for Chapter 9 bankruptcy protection saying "it is clear that the financial emergency in Detroit cannot be successfully addressed outside of such a filing, and it is the only reasonable alternative that is available."
Snyder, a Republican, appointed Orr in March to tackle the city's spiraling long-term debt, which is estimated at $18.5 billion.
The former manufacturing powerhouse has seen its population fall to 700,000 from a peak of 1.8 million people in 1950. The city's government has been beset by corruption cases over the years. Waning investment in street lights and emergency services has left the city struggling to police the streets.
In June, Orr presented a proposal to creditors offering them pennies on the dollar.
His plan had met with resistance from some creditors, most notably Detroit's two pension funds, which had recently filed lawsuits in a state court challenging Snyder's ability to authorize Orr to file for bankruptcy.
http://www.chicagotribune.com/news/chi-detroit-bankruptcy-20130718,0,6170774.story