Detroit emergency manager files largest municipal bankruptcy in US history

By Associated Press, July 18, 2013

DETROIT — 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.

Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

© The Washington Post Company