    
Bignole
Mudiripoyina Bewarse
Username: Bignole
Post Number: 23946
Registered: 03-2004
Posted From: 148.87.67.197
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Votes: 0 (Vote!) | | Posted on Thursday, July 18, 2013 - 6:03 pm: |
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http://money.cnn.com/2013/07/18/news/economy/detroit-bankruptcy/index.html?hpt=h p_t1
Detroit filed for bankruptcy Thursday afternoon, becoming the nation's largest public sector bankruptcy. The move could slash pension benefits to city workers and retirees, and leave bond holders with only pennies on the dollar.
The bankruptcy was filed by Emergency Manager Kevyn Orr and approved by Michigan Gov. Rick Snyder. Snyder said the financial condition of the city left him no choice, and that Detroit could not meet its obligation to either its citizens or its creditors.
"The only feasible path to ensuring the city will be able to meet obligations in the future is to have a successful restructuring via the bankruptcy process," Michigan Gov. Rick Snyder said in the letter authorizing the filing.
But public employee unions are sure to fight the move.
Orr already halted payments on about $2 billion in debt last month, saying the city needed to preserve its dwindling supply of cash. The city faces total liabilities of about $18 billion. Orr's reorganization plan calls for cutting $11.5 billion in debt down to $2 billion. That would mean that investors and retirees would receive an average of just 17% of what they are owed. Specific plans for the cuts are unknown at this time.
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