SalemNews.com, Salem, MA

Nation/World

July 19, 2013

Detroit emergency manager files bankruptcy

DETROIT (AP) — Detroit yesterday became the largest city in U.S. history to file for bankruptcy, as the state-appointed emergency manager filed for Chapter 9 protection.

Kevin Orr, a bankruptcy expert, was hired by the state in March to lead Detroit out of a fiscal free-fall and made the filing today in federal bankruptcy court.

A number of factors — most notably steep population and tax base falls — have been blamed on Detroit’s tumble toward insolvency.

Detroit lost a quarter-million residents between 2000 and 2010. A population that in the 1950s reached 1.8 million is struggling to stay above 700,000. Much of the middle-class and scores of businesses also have fled Detroit, taking their tax dollars with them.

Orr was unable to convince a host of creditors, the city’s union and pension boards to take pennies on the dollar to help facilitate the city’s massive financial restructuring.

He laid out his plans in June meetings with debt holders, in which his team warned there was a 50-50 chance of a bankruptcy filing.

Some creditors were asked to take about 10 cents on the dollar of what the city owed them. Underfunded pension claims would have received less than the 10 cents on the dollar under that plan.

A team of financial experts put together by Orr said that proposal was Detroit’s one shot to permanently fix its fiscal problems.

If the bankruptcy filing is approved, city assets could be liquidated to satisfy demands for payment.

Detroit’s budget deficit is believed to be more than $380 million. Orr has said long-term debt was more than $14 billion and could be between $17 billion and $20 billion.

1
Text Only | Photo Reprints
Nation/World

Local News
  • Police Peabody Friday A gray Mongoose bike valued at $125 was reported missing from Glenway Avenue, as logged at 5:06 p.m. Wade R. Durkee, 47, 261 Newbury St., Peabody, was arrested, as logged at 6:12 p.m., on Crane Brook Way on a charge of receiving stolen

    July 28, 2014

  • Arthur v. Arthur

    July 27, 2014

  • Police: Excessive speed may have been factor in Route 1 crash in Peabody

    Saturday morning at approximately 6 a.m., troopers from the Massachusetts State Police Danvers Barracks responded to a three vehicle crash on Route 1 north in the vicinity of Route 114 in Peabody.

    July 26, 2014

  • Driscoll Gordon College flap nets local LGBT group $12K

    SALEM -- The conservative uproar over Mayor Kim Driscoll's decision to terminate Gordon College's contract to operate Old Town Hall has turned into a cash cow for a local group supporting gay and lesbian youths.

    July 26, 2014 1 Photo 4 Stories

  • 140725_SN_DLE_HOUSE4 Middleton builder rescues First Period house in Danvers from demolition

    DANVERS -- Built before 1730, the First Period Benjamin Holten home at 52 Centre St. was a tear down that did not get torn down, the builder who preserved and restored the house said. "They had holes in the roof this big," said builder Michael Panzer

    July 26, 2014 5 Photos