Federal Judge Rules Detroit Eligible for Bankruptcy

[Edited 12/4/13]

A round-up of links to noteworthy responses to Detroit’s bankruptcy announcement and implications of pension cuts:

More Cities Should Go Bankrupt at Slate

Pension Ruling in Detroit Echoes West to California in the New York Times

A great article by Detroit Free Press journalist and legacy cities advocate John Gallagher outlining next steps for Orr after the ruling

A Growth Strategy for Post-Bankruptcy Detroit, published by Brookings in July 2013


Today’s court ruling confirming Detroit’s insolvency means that:

  • The city may reduce its overall debt (a total of $18.5 billion)
  • More time and more options in sorting out how to pay off the debt that is left
  • Creditors (city unions, pension funds) can lose billions in long-term liabilities–they are expected to appeal the ruling
  • The city may now move towards restoring essential services (with court supervision)

From the New York Times article:

One central argument from lawyers for the city’s public sector unions and retirees was that Detroit’s request for bankruptcy protection came before it had made good faith attempts to negotiate with creditors.

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