After a floundering manufacturing industry, chronic mismanagement, and a dwindling population, the city of Detroit has filed for Chapter 9 bankruptcy.
Yesterday, the city of Detroit, represented by Chrysler bankruptcy veteran Kevyn Orr, filed Chapter 9 bankruptcy paperwork with the U.S. Bankruptcy Court for the Eastern District of Michigan.
Chapter 9 bankruptcy should give the city protection from creditors and unions. Currently, Detroit has a $18.5 billion debt load.
The bankruptcy filing is the result of not seeing enough progress during out-of-court negotiations with creditors; unions, pensions, and other groups blocked the way to settling for less than they were owed. Now, due to the filing, many creditors may only get pennies on the dollar.
Detroit is home for 700,000 residents.
[Source: Detroit Free Press]