“The fiscal realities confronting Detroit have been ignored for too long. I’m making this tough decision so the people of Detroit will have the basic services they deserve and so we can start to put Detroit on a solid financial footing that will allow it to grow and prosper in the future. This is a difficult step, but the only viable option to address a problem that has been six decades in the making.”
Gov. Rick Snyder
Detroit has become the largest city in U.S. history to file for bankruptcy.
State-appointed emergency manager Kevyn Orr on Thursday asked a federal judge permission to place the city into Chapter 9 bankruptcy protection.
If approved, the filing would allow Orr to liquidate city assets to satisfy a host of creditors and city pensioners lined up to recoup losses from bad bond investments and unpaid contracts.
A number of factors -- most notably steep population and tax base falls -- have been blamed on Detroit's tumble toward insolvency. Detroit lost a quarter-million residents between 2000 and 2010.
Orr was unable to convince enough creditors, bondholders and employee pension representatives to accept pennies on the dollar as he attempted a fiscal restructuring of Detroit.