Judge OKs Detroit bankruptcy-exit plan, lets city slash over $7B from its debtload
Less than 16 months after the city of Detroit made history by becoming the largest U.S. city ever to file for bankruptcy, a federal judge has approved a restructuring plan that will allow the municipality to cut over $7 billion from its debt load.
The Friday ruling by U.S. Bankruptcy Judge Steven W. Rhodes also provides for the city to invest $1.7 billion in its decaying infrastructure and preserves much of Detroit’s pension program for city employees, according to Bloomberg, the Detroit Free Press, the New York Times (reg. req.) and the Wall Street Journal (sub. req.).
Private investment and continuing oversight of city finances by a commission on which the state is represented are also hallmarks of the plan, which Rhodes determined to be fair, feasible and in the best interest of creditors in the Eastern District of Michigan case.
“People will long remember that when Detroit arrived at this troubling hour, its residents and leaders–with supporters statewide–started to pull together as one,” said Michigan Gov. Rick Snyder in a written statement. “This day marks the end of the nation’s largest municipal bankruptcy, resolved quickly and successfully as a result of cooperation, compromise and a shared vision from many parties. And it offers hope to hundreds of thousands of residents who call Detroit home.”
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