Largest Municipal Bankruptcy in History: Detroit Filing for Bankruptcy Protection

Detroit’s emergency manager has filed for bankruptcy protection for the city. This makes the Detroit’s filing the largest for a municipality in US history.

In June, the manager released a plan to restructure the city’s debt and its financial obligations that would leave many creditors with much less than they are currently  owed. At that time the manager, Kevyn Orr, warned that if negotiations could not get beyond an impasse he would move quickly to seek bankruptcy protection.

There’s much more to be announced; Detroit’s two pension funds filed suit in state court to prevent Orr from reducing municipal retiree benefits as part of any bankruptcy restructuring plan. The pension funds currently have about $9.2 billion in unfunded pension and retiree health care liabilities.

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