Detroit files for Chapter 9 bankruptcy amid staggering debts
By Nancy Kaffer, Stephen Henderson and Matt Helms, Detroit Free Press Staff Writers, July 18, 2013
“The City of Detroit filed this afternoon for Chapter 9 bankruptcy protection in federal court, laying the groundwork for a historic effort to bail out a major U.S. city that is sinking under billions of dollars in debt and decades of mismanagement, population flight and loss of tax revenue.
The filing begins a 30- to 90-day period that will determine whether the city is eligible for Chapter 9 protection and define how many claimants might compete for the limited settlement resources that Detroit has to offer. The bankruptcy petition would seek protection from creditors and unions who are renegotiating $18.5 billion in debt and other liabilities.
“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,” said Gov. Rick Snyder. “This is a difficult step, but the only viable option to address a problem that has been six decades in the making.”
Detroit emergency manager Kevyn Orr, who inJune released a plan to restructure the city’s debt and obligations that would leave many creditors with much less than they are owed, had warned consistently that if negotiations hit an impasse, he would move quickly to seek bankruptcy protection.
■ PDF: Read the bankruptcy filing
Gov. Rick Snyder signed off on the filing in a letter attached to court documents filed today in U.S. Bankruptcy Court in the Eastern District of Michigan. A spokeswoman for Snyder did not immediately return telephone calls today…”