DETROIT, MI – The City of Detroit has submitted and filed with the Federal Bankruptcy Court and Judge Steven Rhodes it’s plan of restructuring its massive debt obligations. At no time in history has this ever taken place anywhere in the United States for such a huge debt obligation for a city. It once again is another landmark day in the storied past and future of Detroit.
The document filed with the courts today is 134 pages long. State aid, money from foundations and private donors would shore up city retirement funds along with putting the Detroit Institute of Arts at bay from creditors wanting to get paid. You can read or download a copy of the proposal here.
Detroit’s hopes of exiting bankruptcy quickly may have just come to a screeching halt though. The city’s pension funds and others were granted permission by U.S. 6th Circuit Court of Appeals that they can file a direct appeal of the city’s bankruptcy eligibility. That ruling is based on the belief of the pension funds that Detroit’s Emergency Financial Manager, Kevyn Orr, did not negotiate in good faith and that Judge Steven Rhodes did not rule correctly on their behalf. If the Court of Appeals rules in favor of the pension funds and those seeking this decision, it could throw Detroit’s bankruptcy in the trash and the city would have to start back at square one.
Detroit’s bankruptcy is being very closely watched because other places like Boston and Chicago may end up having to do the very same thing. Chicago’s debt is estimated to be twice of what Detroit’s is at $32 billion dollars or more.