Federal court ruled Tuesday that the city of Detroit can be put into receivership to renegotiate the massive debt, amounting to 18 billion U.S. dollars, protected from the claims of creditors. Officials of Detroit, Michigan in the state, submitted a request to put the city into bankruptcy, saying that it can not meet its obligations to its employees in the municipality, the municipality pensioners and bondholders while maintaining its basic services their residents.
It’s really an important day, said the Judge Steven Rhodes announcing his decision. There is a judgment that this once proud city can not repay its debts. He is also a chance for a new beginning. The Detroit loses years of prosperity as the population decreases as the tax base declines as the American automotive industry, synonymous with the city.
Using the protection of the bankruptcy regime, Detroit will terminate some contracts and breached certain of its obligations and is expected to divest assets and forcing creditors to suffer some damage as it reorganises its services. Detroit is the largest city in the U.S. who have asked to be placed under the receivership.
By Nicole P.