Motor City Cruises Into Bankruptcy


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.”

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