The city of Detroit filed for Chapter 9 bankruptcy protection in federal court Thursday, laying the groundwork for a historic effort to bail out a city that is sinking under billions of dollars in debt and decades of mismanagement, population flight and loss of tax revenue.
The bankruptcy filing makes Detroit the largest city in U.S. history to do so.
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.
Editor's notes: In that last sentence, we discover the real problem --- the socialists in the progressive unions continued to demand higher wages and more involved retirement/benefit packages. The emergency city manager declared an impasse and, now, all contracts and past agreements are gone. Understand that if Obama is going to take credit for having "saved Detroit," he certainly must take the blame for the failure of that claim. Detroit has been under Democrat control for decades. Nothing else needs to be said when searching for reasons leading to this monumental disaster. No one in the Democrat Party knows how to balance a budget nor does anyone think this is important. So who is having the last laugh, now???
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