Thread: 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.

http://www.businessinsider.com/detroit-likely-to-file-for-bankruptcy-2013-7?utm_source=buffer&utm_campaign=Buffer&utm_conten t=buffer9db1d&utm_medium=facebook


Detroit Chapter 9 Bankruptcy Filing - WXYZ by webteam2410

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Bankrupt Detroit Demands Federal Pork



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Detroit files for largest municipal bankruptcy in US history

Posted on 18 July, 2013 by clyde


Fox News is reporting that Detroit filed for the largest municipal bankruptcy in U.S. history Thursday after steep population and tax base declines sent it tumbling toward insolvency.
The filing by a state-appointed emergency manager means that if the bankruptcy filing is approved, city assets could be liquidated to satisfy demands for payment.
Kevin Orr, a bankruptcy expert, was hired by the state in March to lead Detroit out of a fiscal free-fall and made the filing Thursday in federal bankruptcy court.
The filing leads to a 30 to 90 day period that will determine whether or not the city of Detroit is eligible for Chapter 9 protection, and define the number of claimants who may compete for Detroit’s limited settlement resources. The petition seeks protection from unions and creditors who are renegotiating $18.5 billion in debt and liabilities, according to the Detroit Free Press.
A number of factors — most notably steep population and tax base falls — have been blamed on Detroit’s descent toward insolvency.
Detroit lost a quarter-million residents between 2000 and 2010. A population that in the 1950s reached 1.8 million is struggling to stay above 700,000. Much of the middle-class and scores of businesses also have fled Detroit, taking their tax dollars with them.
Orr was unable to convince a host of creditors, including the city’s union and pension boards to take pennies on the dollar to help facilitate the city’s massive financial restructuring.
He laid out his plans in June meetings with debt holders, in which his team warned there was a 50-50 chance of a bankruptcy filing.
Some creditors were asked to take about 10 cents on the dollar of what the city owed them. Underfunded pension claims would have received less than 10 cents on the dollar under that plan.
A team of financial experts put together by Orr said that proposal was Detroit’s one shot to permanently fix its fiscal problems.
Detroit’s budget deficit is believed to be more than $380 million. Orr has said long-term debt was more than $14 billion and could be between $17 billion and $20 billion.

http://gopthedailydose.com/2013/07/1...in-us-history/

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