The city of Detroit filed for bankruptcy today, making history as the largest city in the United States to ever perform such course. The announcement was made by a Detroit City official.
Along with that, this move is also considered as the biggest municipal bankruptcy filing in the history of the United States in terms of the amount of debt involved. The filing required the approval of Detroit City Governor Rick Snyder and the city's emergency manager Kevin D. Orr.
Orr said that the debt was estimated to be between US$18 billion to US$20 billion. The emergency manager was appointed by Snyder and was tasked to fix the financial trouble of the city. The exact amount of Detroit's debt is still uncertain.
"It's not enough to say, let's reduce debt," commented an expert in municipal bankruptcy. "At the end of the day, you need a real recovery plan. Otherwise you're just going to repeat the whole thing over again," he added.
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