2. Detroit is the largest city in U.S. history to file for bankruptcy. Once an industrial hub, Detroit is now seen as a model of urban decline.
As the Associated Press notes, bankruptcy could mean lay offs for municipal employees, selling off assets, raising fees and scaling back basic services such as trash collection.
6. Michigan Gov. Rick Snyder said the bankruptcy could give Detroit a “fresh start without burdens of debt it cannot hope to fully pay.”
“Let me be blunt, Detroit’s broke,” Governor Snyder said.
Detroit lost a quarter-million residents between 2000 and 2010. Much of the middle-class and scores of businesses also have fled Detroit, taking their tax dollars with them.
10. Snyder laid out the reasons why Detroit needed to file for bankruptcy:
Snyder lays case for Chap 9: Unemployment tripled since 2000 and is more than double national avg.
Snyder lays case for Chap 9: #Detroit homicide rate highest level in 40 years.
Snyder lays case for Chap 9: Only 8.7% of cop cases are solved. State avg is 30.5%
14. Tax rates
Snyder lays case for Chap 9: #Detroit tax rates at legal limits. Residents can’t afford to pay more
15. Abandoned structures
Snyder lays case for Chap 9: 78,000 abandoned structures in city
16. The Detroit Free Press explains what happens next:
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.
17. General Motors issued a statement Thursday expressing support for the decision:
“GM is proud to call Detroit home and today’s bankruptcy declaration is a day that we and others hoped would not come,” the statement said.
“We believe, however, that today also can mark a clean start for the city.”
18. Detroit Mayor, Dave Bing, reacted to the bankruptcy filing at a press conference. He said, “This is a very difficult day for me as I’m sure it is for a lot of our citizens here in Detroit.”
Bing said, “I really didn’t want to go in this direction. Now that we are here, we have to make the best of it.”
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