The City of Detroit Files for Chapter 9 Bankruptcy Protection

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On July 18, the City of Detroit filed for protection under chapter 9 of the Bankruptcy Code, making Detroit the largest municipality to file for chapter 9 relief in United States history. Detroit is seeking to restructure approximately $18 billion in accrued obligations, consisting of approximately $11.9 billion in unsecured obligations and $6.4 billion in secured obligations. Prior to the bankruptcy filing, the City offered to pay unsecured creditors a pro rata distribution of $2 billion in principal amount of interest-only, limited recourse participation notes.

Detroit filed several significant motions in its first days in bankruptcy. They included:

Bankruptcy Judge Steven W. Rhodes has scheduled a “first day” hearing on these and other matters for July 23. We will continue to update developments in the Detroit Chapter 9 case.