Detroit Eligible for Chapter 9 Bankruptcy
U.S. Bankruptcy Judge Steven Rhodes ruled that Detroit, Michigan is eligible for Chapter 9 bankruptcy after a four months of uncertainty. Detroit makes history as the largest U.S. municipality to enter Chapter 9 bankruptcy. “The court finds that the city was generally not paying its debts as they became due,” said Judge Rhodes, deeming this as an opportunity for a “fresh start.” The city plans to restructure its debt and revamp government operations in the near future. Detroit Emergency Manager Kevyn Orr admits that cuts will need to be made, including cuts to pension funds which was approved by Judge Rhodes in his ruling.