Detroit emergency manager files bankruptcy

DETROIT AP — Detroit on Thursday became the largest city in U.S. history to file for bankruptcy, as the state-appointed emergency manager filed for Chapter 9 protection.Kevyn 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.A number of factors — most notably steep population and tax base falls — have been blamed on Detroits tumble 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.In recent months, the city has relied on state-backed bond money to meet payroll for its approximately 10,000 employees.Orr was unable to convince a host of creditors, the citys union and pension boards to take pennies on the dollar to help facilitate the citys massive financial restructuring. If the bankruptcy filing is approved, city assets could be liquidated to satisfy demands for payment.”Only one feasible path offers a way out,” Gov. Rick Snyder said in a letter to Orr and state Treasurer Andy Dillon, approving the bankruptcy.

via Detroit emergency manager files bankruptcy.

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