Detroit Becomes the Largest US City to File Bankruptcy

Submitted by Anonymous (not verified) on Fri, 07/19/2013 - 01:18
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By Mary Ann Pekara
Detroit filed for Chapter 9 bankruptcy protection in U.S. Bankruptcy Court in the Eastern District of Michigan today.
Detroit will now enter into a 30-90 day period to determine whether or not the city is eligible for Chapter 9 protection and all creditors will have an opportunity to fight for who will get a piece of the $18.5 billion debt.
As the largest city in the US to file bankruptcy, Detroit was the 5th largest city in the country in 1950 with a population of approximately 1.8 million people. Today, Detroit's population is under 700,000.
What used to be one of the largest manufacturing cities in the country is now a city riddled with billions of dollars of debt.
In March, Michigan Governor Rick Snyder asked Emergency Manager, Kevyn Orr, to resolve the city's overwhelming debt issue. Orr was the one to ask for Snyder's approval to file the bankruptcy.
Snyder commented, "I have reached the conclusion that this step is necessary after a thorough review of all the available alternatives, and I authorize this necessary step as a last resort to return this great City to financial and civic health for its residents and taxpayers. This decision comes in the wake of 60 years of decline for the city, a period in which reality was often ignored."