Yesterday, Detroit became the largest municipality in U.S. history to declare bankruptcy. Such an action is unprecedented, so the path forward is murky. Yet one word seems to signify what lies ahead over the next year: battles.
"Detroit on Thursday became the largest American city to file for bankruptcy, a historic move sure to ignite complex battles in coming months with creditors, pensioners and unions who stand to lose significantly as the state tries to rescue a city whose failure Gov. Rick Snyder said was 60 years in the making," report Matt Helms, Nancy Kaffer and Stephen Henderson.
"Bankruptcy and restructuring experts said the filing will initiate a new round of battles in federal court, potentially setting national precedents on matters ranging from whether bondholders get repaid when cities run out of money to whether public pensions, previously thought to be sacrosanct under the Michigan Constitution, are protected in municipal bankruptcies."
"Financially troubled cities around the nation will be watching what happens in the Motor City for lessons that could apply to them."
Nathan Bomey has provided a step-by-step look at what the Chapter 9 process will entail.
FULL STORY: Detroit's bankruptcy to set off pitched battles with creditors, pensions, unions
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