HomePublicationsNewsletter ArchiveVolume 19Issue 20City of Detroit Files for Bankruptcy Protection

On Thursday, July 18, 2013, the City of Detroit filed a petition for Chapter 9 bankruptcy protection in the US Bankruptcy Court for the Eastern District of Michigan. Detroit is the largest city in the country to have filed for bankruptcy protection.

The petition was filed by Emergency Manager Kevyn Orr, who was appointed to manage the city’s finances by Governor Richard Snyder on March 14, 2013. Under Michigan law, Mr. Orr is required to receive approval from Governor Snyder to file for bankruptcy protection for the city and, on July 16, 2013 submitted a letter to the Governor requesting such approval. The Governor approved the request in a response dated July 18, 2013, stating that “it is clear that the financial emergency in Detroit cannot be successfully addressed outside of such a filing, and it is the only reasonable alternative that is available.” The July 18, 2013 response further notes the financial and structural issues facing the city and concludes that the bankruptcy process is “[t]he only feasible path…of ensuring the City can meet its basic obligations to its citizens.”

The petition states that the city estimates it has over 100,000 creditors, and various news reports have suggested total liabilities in the $18-$20 billion range. At this time, the court will review the initial petition and assign a judge to the case before proceeding on the merits. The case title is In re: City of Detroit, Michigan, Case No. 13-53846. To view a copy of the petition, please visit the website for the US Bankruptcy Court for the Eastern District of Michigan, here: http://www.mieb.uscourts.gov/


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