Detroit files bankruptcy protection, then what?

Jul 19, 2013

Gov. Rick Snyder said the city of Detroit needs a “radically restructure” and bankruptcy is the "only feasible option" to fix the city's finances. But many worry about the potential impact to municipalities’ bonding credit and state employees’ pension plan.
Credit Wikimedia Commons

A much-feared -- but widely anticipated -- day arrived yesterday in Michigan’s largest city.  Officials filed a 16-page bankruptcy petition on behalf of the city of Detroit in U.S. Court, making the city the largest municipal bankruptcy in the U.S. history.

Gov. Rick Snyder authorized the filing yesterday after efforts by state-appointed Emergency Manager Kevyn Orr failed to satisfy numerous creditors. According to reports, the city owes as many as 100,000 creditors and  accrued obligation is as much as $20 billion.

Joining the Current State to help us understand what’s happening and its impact are John Gallagher, reporter of the Detroit Free Press and Eric Scorsone, a municipal finance expert at Michigan State University. Also Michigan Public Radio state capitol bureau chief Rick Pluta joins the Current State.