BREAKING NEWS: DETROIT CITY FILES FOR BANKRUPTCY

After months of intensified financial challenge and efforts to reduce mountainous debt, the city of Detroit filed for bankruptcy protection in federal court on Thursday, the largest American city ever to do so.

It is a sobering development in this history of a once-proud city that continues to stand as the symbol of American automobile manufacturing might.

The decision was made by Kevyn Orr, the emergency financial manager appointed earlier this year by Michigan’s Republican governor, Rick Snyder. The governor has estimated that the Detroit’s debt stood at $18 billion and perhaps as high as $20 billion.

For the last few months, Orr had met with labor unions and others to seek to find a way to restructure the city’s crippling debt and to look for ways to place Detroit on solid financial footing. But the financial manager said that those efforts ultimately came up short.

“What really pushed us in was the fact that our negotiations met an impasse,” said Bill Nowling, a spokesman for Orr, in an interview shortly after the bankruptcy filing.

“We saw lawsuits filed from unions,” Nowling said, “And it became apparent that the likelihood to reach a negotiated settlement was diminishing by the minute, And Detroit has no minutes to give.”

It is a stunning sign of the decline of a onetime powerhouse American city. Detroit’s population has declined dramatically over the last half century, from nearly 2 million residents in 1950 to barely 700,000 today. The city’s finances have become strained to the breaking point as Detroit has struggled to provide services in an municipality ravaged by unemployment and huge pockets of poverty.

The appointment of Orr in March was, to many, a harbinger of troubles that lay ahead. It was also a contentious moment in the city’s racial and political landscape. Snyder, a Republican who is white, decided to appoint an emergency manager with nearly unlimited power over a city that is highly Democratic and nearly 85 percent African-American.

Nonetheless, Orr’s office said that the city will be able to resolve its long-term debt issues far more simply by funneling all financial matters through the single entity of bankruptcy court, rather than the piecemeal approach of dealing with a number of unions and creditors.



Source CNN