Detroit officials update bankruptcy plan

Written By Unknown on Jumat, 19 Juli 2013 | 21.48

A day after entering bankruptcy proceedings, officials in Detroit updated the city Friday morning with how the city plans to proceed.

Gov. Rick Snyder and Emergency Manager Kevyn Orr attended at a press event that began at 10 a.m.

Although the move has been on the table for months, the city now faces an uncertain future as it struggles to get back to financial health. Municipal worker layoffs, service cutbacks and asset sales could be in the offing.

The city is even thinking about selling off its valuable art collection, including works by Picasso, van Gogh and Bruegel, to raise funds. There's also talk of selling venues such as the Detroit Zoo, or historic Fort Wayne, a tourist site in the city.

"Services will remain open, paycheques will be made, bills will be paid," Orr said Thursday.

Few cities have felt the demise of America's manufacturing sector as acutely as Detroit. With a population of close to two million in the 1950s, the city now has about a three quarters of a million residents. The population has declined by 25 per cent in the last decade alone.

The city has more than 100,000 different creditors, its two largest being underfunded pension plans for city workers, and one for police and fire services. Those two plans are owned $2 billion US and $1.4 billion, respectively.

Orr was unable to convince the city's many creditors to accept less than full value for their debt, so the city entered bankruptcy proceedings as a last resort. Orr pitched the process as a viable option for all sides, and he hopes it will be competed within about 12 months.

Is filing for bankruptcy the right decision for Detroit?


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