The Detroit bankruptcy filing today was an uncommon occasion, according to financial analysts. According to the analysts, large scale bankruptcies happened infrequently but extreme outliers such as Detroit might have been affected extremely by the nationwide struggle against the recession.
The municipal bond industry is worth US$3.7 trillion.
Financial firm Chapman and Cutler LLP's partner analyst James Spiotto explained the bankruptcies in recent memory. This year, he said, there were only four Chapter 9 municipality bankruptcy filings. Two of these four filings were special-purpose districts located in Arkansas and Oklahoma.
This was lower than last year where 12 filed for Chapter 9 protection. A year before that, there were 13.
Usually, special districts and utilities are the ones who apply for federal protection. Only 61 Chapter 9 bankruptcy filings from cities and counties were recorded since 1954.
The state with the most number of Chapter 9 protection filing was Nebraska with a total of 9. California and Texas were second and third.
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