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Detroit files for record bankruptcy

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  • suesarkis2001
    Detroit files for record bankruptcy By Daniel Strauss - 07/18/13 04:28 PM ET The city of Detroit filed for Chapter 9 bankruptcy on Thursday afternoon.
    Message 1 of 1 , Jul 19, 2013
      Detroit files for record bankruptcy

      By Daniel Strauss - 07/18/13 04:28 PM ET

      The city of Detroit filed for Chapter 9 bankruptcy on Thursday afternoon.
      Detroit's emergency manager, Kevyn Orr, filed the request to begin what
      will be the biggest municipal bankruptcy in United States history. Chapter 9
      status would shield the municipality from some $18.5 billion in debt and
      other liabilities.

      The decision to file for bankruptcy required the approval of both Orr and
      Michigan Gov. Rick Snyder (R). Orr was appointed by Snyder to try and
      salvage the city's finances, which reached a crisis point amid a steady decline
      in population and tax receipts.

      "This was a difficult decision but I believed there were no other
      options," Snyder said Thursday in a _video clip_
      (http://www.youtube.com/watch?v=h0WKENzYcTU&feature=youtu.be) .

      Snyder added that the situation had been forming for 60 years.

      "From a financial point of view, let me be blunt: Detroit's broke. It's
      been spending 38 cents on the dollar towards legacy costs. That number was
      projected to grow to 65 cents on the dollar. That's not a sustainable

      More important, Snyder added, is "poor services" being delivered to the
      citizens of Detroit.

      "If you look at it in terms of public safety, Detroit has been on the top
      ten list of the most violent cities in 24 of the last 27 years," Snyder

      Snyder said federal bankruptcy would give Detroit an opportunity for a
      fresh start.

      "It's an opportunity to say let's make realistic promises to creditors by
      revising those debts," Snyder said.

      The White House said President Obama is monitoring the developments in
      Detroit closely.

      "The president and members of the President’s senior team continue to
      closely monitor the situation in Detroit," White House spokeswoman Amy Brundage
      said in a statement.
      "While leaders on the ground in Michigan and the city’s creditors
      understand that they must find a solution to Detroit’s serious financial challenge,
      we remain committed to continuing our strong partnership with Detroit as it
      works to recover and revitalize and maintain its status as one of
      America's great cities."
      Filing for Chapter 9 bankruptcy leaves restructuring Detroit's finances to
      a federal bankruptcy judge and Orr. The process could take years, and is
      likely to be contentious.

      The restructuring plan is likely to follow a proposal Orr unveiled about a
      month earlier, The Detroit News said.

      Sen. Carl Levin (D-Mich.) a native of Detroit, said he was saddened by the
      bankruptcy news.

      "Detroit is more than a part of the state I represent in Washington. It is
      my lifelong home. And so today’s news that the city has filed for
      bankruptcy protection saddens me, however necessary it may have been," Levin said
      in a statement.
      "But what stands out about Detroit through the centuries is its grit and
      resilience. I know firsthand, because I live in Detroit, that our city is on
      the rebound in some key ways, and I know deep in my heart that the people
      of Detroit will face this latest challenge with the same determination that
      we have always shown."
      Sen. Debbie Stabenow (D-Mich.) said she was confident the city would
      weather the storm.

      "This is certainly one of the greatest challenges Detroit has faced in its
      long history, but the people of Michigan’s largest city have met and
      overcome tremendous challenges in the past," Stabenow said.
      "There are so many positive things happening across the city, and I have
      every confidence that Detroit will emerge even stronger and more resilient."

      _Detroit Bankruptcy filing_

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