Thursday, July 18, 2013
Detroit's emergency financial manager says bankruptcy is the "first step toward restoring the city."
The comments came after Detroit became the biggest U.S. city to file for bankruptcy Thursday.
The filing put the city on an uncertain course that could mean laying off municipal employees, selling off assets, raising fees and scaling back basic services such as trash collection and snow plowing, which have already been slashed.
Emergency financial manager Kevyn Orr says it's business as usual in Detroit. He says the city will stay open and bills will be paid.
Detroit Mayor Dave Bing says he didn't want the city to go bankrupt, but now that it's happened, the people of the city "have to make the best of it."
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.