Downtown Detroit (Detroit Free Press)
DETROIT -- The city of Detroit has filed for Chapter 9 bankruptcy protection, marking the largest municipal bankruptcy in American history.
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.
Detroit emergency manager Kevyn Orr, who in June released a plan to restructure the city's debt and obligations that would leave many creditors with much less than they are owed, has warned consistently that if negotiations hit an impasse, he would move quickly to seek bankruptcy protection.
Gov. Rick Snyder would have to sign off on the filing. A spokeswoman did not immediately return telephone calls today.
Orr's spokesman Bill Nowling would not confirm today that the filing is imminent. However, he said, "Pension boards, insurers, it's clear that if you're suing us, your response is 'no.' We still have other creditors we continue to have meetings with, other stakeholders who are trying to find a solution here, because they recognize that, at the end of the day, we have to have a city that can provide basic services to its 700,000 residents."
(Detroit Free Press)