Federal Judge Allows Democrat Run Detroit To Move Forward With Bankruptcy

[RT] A federal judge ruled Tuesday that Detroit, Michigan is indeed eligible for bankruptcy protection, giving the go-ahead to the once booming Motor City to move forward with plans to restructure more than $18 billion in debt.

Amid reading excerpts from a lengthy decision of more than 140 pages, United States Bankruptcy Judge Steven Rhodes announced during Tuesday morning’s historic hearing that he approved of Detroit’s Chapter 9 filing, in turn authorizing the largest municipal bankruptcy ever in the US to proceed.

Detroit — once the automobile manufacturing capital of the world and an icon of Americana — has fallen heavily into debt during the last  few decades, so much so that Governor Rick Snyder hired bankruptcy expert Kevin Orr to man the helm of the city in March and assume the role of emergency manager. Four months later, though, Orr’s attempt to salvage the city proved to be futile, and Detroit filed for Chapter 9 protection this past July.

In order to decide if Detroit could be awarded protection from creditors, Judge Rhodes was forced to find the city insolvent and agree that it was authorized to file for bankruptcy in the first place. Additionally, Rhodes had to find that city officials either negotiated with creditors in “good faith” or that those negotiations were impractical.

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