It's official: Detroit just became the biggest city to file for bankruptcy in U.S. history.
Emergency manager Kevyn Orr filed for Chapter 9 bankruptcy protection this afternoon, according to the Associated Press. Most recent estimates suggest the municipal government owes at least $18.5 billion. Governor Rick Snyder signed off on the filing, as required, in a letter attached to court documents filed today in U.S. Bankruptcy Court in the Eastern District of Michigan. The city will now embark on a multi-month process in which the court will determine how the city's limited coffers might be divided up among its creditors.
The main challenge to this process is likely to come from representatives for the city's public employees and retirees, who had planned to go to court to stop or at least delay the city from filing for bankruptcy assuming the filings would include plans to reduce pension benefits. Michigan's constitution explicitly protects public pensions, but any plans to raid Detroit's pension funds weren't immediately apparent in Thursday's court filing, which is published below. The filing effectively halts any other court proceedings while it makes its way through the Chapter 9 bankruptcy process.
Read more about the filing over at the Free Press.