Motor City Cruises Into Bankruptcy

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On July 18, 2013, the City of Detroit, Michigan commenced a bankruptcy case under chapter 9 of the Bankruptcy Code as a result of over $18 billion dollars in accrued obligations and dwindling revenue sources. Since the commencement of a chapter 9 case in Michigan requires the express authorization of the Governor, Detroit’s petition attached a very poignant letter from Gov. Richard Snyder acknowledging the financial issues plaguing the City, and authorizing the chapter 9 petition as it posed the only viable solution for resolving the City’s financial problems. Some of the key points from Gov. Snyder’s letter include the following:

- “The City's population has declined 63% from its peak, including a 28% decline since 2000. That exodus has brought Detroit to the point that it cannot satisfy promises it made in the past.”

Please see full alert below for more information.

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Topics:  Chapter 9, Deficit Reduction, Detroit, Economic Downturn, Municipal Bankruptcy, Richard Snyder

Published In: Administrative Agency Updates, Bankruptcy Updates, Finance & Banking Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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