Detroit filed for the largest municipal bankruptcy in U.S. history Thursday after steep population and tax base declines sent it tumbling toward insolvency.
The filing by a state-appointed emergency manager means that if the bankruptcy filing is approved, city assets could be liquidated to satisfy demands for payment.
Kevin 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.
“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. The letter was attached to the bankruptcy filing.
“The citizens of Detroit need and deserve a clear road out of the cycle of ever-decreasing services,” Snyder wrote. “The city’s creditors, as well as its many dedicated public servants, deserve to know what promises the city can and will keep. The only way to do those things is to radically restructure the city and allow it to reinvent itself without the burden of impossible obligations.”
Snyder had determined earlier this year that Detroit was in a financial emergency and without a plan to improve things. Snyder hired Orr in March, and he released a plan to restructure the city’s debt and obligations that would leave many creditors with much less than they are owed.
Orr was unable to convince a host of creditors, including the city’s union and pension boards, to take pennies on the dollar to help facilitate the city’s massive financial restructuring.
Some creditors were asked to take about 10 cents on the dollar of what the city owed them. Underfunded pension claims would have received less than 10 cents on the dollar under that plan.
A team of financial experts put together by Orr said that proposal was Detroit’s one shot to permanently fix its fiscal problems.
The filing leads to a 30 to 90 day period that will determine whether or not the city of Detroit is eligible for Chapter 9 protection, and define the number of claimants who may compete for Detroit’s limited settlement resources. The petition seeks protection from unions and creditors who are renegotiating $18.5 billion in debt and liabilities, according to the Detroit Free Press.
“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 Thursday.
“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,” the statement read.
Sen. Carl Levin, D-Mich., remained positive about Detroit’s outlook in spite of the major blow that bankruptcy delivered:
“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,” the Senator said in a statement released Thursday.
In a press conference Thursday evening, Orr stated that bankruptcy is the “first step toward restoring the city,” and promised that “nothing changes from the ordinary citizen’s perspective.”
In the same conference, Detroit Mayor Dave Bing said he didn’t want the city to go bankrupt, but now that it’s happened, the people of the city “have to make the best of it.”
A number of factors — most notably steep population and tax base falls — have been blamed on Detroit’s descent toward insolvency.
Detroit was once synonymous with U.S. manufacturing prowess. Its automotive giants switched production to planes, tanks and munitions during World War II, earning the city the nickname “Arsenal of Democracy.”
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.
Detroit’s budget deficit is believed to be more than $380 million. Orr has said long-term debt was more than $14 billion and could be between $17 billion and $20 billion.












The seven members of the Oxford child grooming gang who were found guilty (clockwise from top left): Kamar Jamil, Akhtar Dogar, Anjum Dogar, Assad Hussain, Mohammed Karrar, Bassam Karrar, and Zeeshan Ahmed.







With the level of the federal deficit approaching $17,000,000,000 (trillions), the interest on which costs Americans the first $1,300,000,000 (billion) they make every day, and the recent explosion of federal power over the citizens and the states as handed to U.S. socialists by the Supreme Court and the prolific pen of the Executive Order, the independence from government rule and tyranny sought by our Founders is all but neutralized. We and our children are indebted and imprisoned by design of a leftist attack on our country, and an Orwellian federal government spies on patriotic citizens and treats them like enemies while Islamic terrorists are welcomed into the White House.

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