Difficult Fact Based Decision

by Hal Mooz 18. July 2013 16:36

Detroit becomes largest US city to file for bankruptcy

Detroit, saddled with more than $18 billion in debt, became the biggest U.S. city in history to file for bankruptcy on Thursday.

“The fiscal realities confronting Detroit have been ignored for too long. I’m making this tough decision so the people of Detroit will have the basic services they deserve and so we can start to put Detroit on a solid financial footing that will allow it to grow and prosper in the future,” Gov. Rick Snyder said in a statement.

Snyder authorized the city's emergency manager to file for federal bankruptcy, as required by state law, saying it was the only option to restore the city and provide residents with necessary public services.

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 in federal bankruptcy court. Orr was unable to convince a host of creditors -- including pensions, Teamsters, employee associations and banks -- to take pennies on the dollar to help facilitate the city's massive financial restructuring.

If the bankruptcy filing is approved, city assets could be liquidated to satisfy demands for payment.




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