Detroit’s Bankruptcy: 40% of Street Lights Don’t Work, 66% of Ambulances Out of Service
Detroit’s bankruptcy petition paints a bleak picture for the Motor City: more than 100,000 creditors, more than $18 billion in accrued obligations and a homicide rate that is at its highest level in nearly 40 years.
Detroit filed for bankruptcy protection Thursday afternoon, becoming the largest ever municipal bankruptcy case. It becomes the latest in a small but high-profile list of municipalities to file after the recession. The cities of Stockton and San Bernardino in California filed last summer and Jefferson County, Ala., did so in November 2011.
The city was steered into bankruptcy by an emergency manager, Kevyn Orr, who did not secure agreements with enough bondholders, pension funds and other credits to restructure the city’s debt out of court. The Wall Street Journal previously reported that creditors such as Bank of America Corp. BAC +3.14% and UBS AG were in discussions with the city.
The decision to declare bankruptcy “comes in the wake of 60 years of decline for the city, a period in which reality was often ignored,”