Tags: detroit | bankruptcy | ends | emergency

Detroit Bankruptcy Over; Emergency Manager Resigns

Image: Detroit Bankruptcy Over; Emergency Manager Resigns
(L-R) Michigan Governor Rick Snyder, Detroit Mayor Mike Duggan and former Detroit Emergency Manager Kevyn Orr hold a press conference to announce the end of the City of Detroit's emergency status and its exit from bankruptcy December 10, 2014 in Detroit, Michigan. (Bill Pugliano/Getty Images)

By    |   Wednesday, 10 Dec 2014 12:23 PM

Detroit's bankruptcy, the largest municipal bust in American history, is over after more than a year of proceedings, Michigan Gov. Rick Snyder declared Tuesday.

"This letter approves termination of the financial emergency status, the receivership of the City of Detroit, and your contract as Emergency Manager of the City of Detroit," Snyder wrote in an official reply to Emergency Manager Kevyn Orr, who will now resign the temporary position.

ABC's Detroit affiliate WXYZ reported that Detroit's long term debt was a whopping $18 billion, with a daily operating fund deficit of $300 million.

After city employee's paychecks began to bounce in the summer of last year, Orr was appointed to file and oversee a bankruptcy. In 2015, after the financial restructuring, Detroit will accumulate a fund surplus of $100 million by year's end, and continue to be under the control of the State Financial Review Commission for the next 13 years.

According to The New York Times, a federal bankruptcy judge approved a settlement that allows the city to shed $7 billion in debt, and spend $1.7 billion to get essential city services back on their feet. Before bankruptcy, for example, the average police response time was 58 minutes. These days, it's 18.

During the restructuring, the city's pensioners saw cuts to their future income, and the stadium where the Red Wings play was sold to private investors.

Despite the restructuring, Detroit is hardly out of the woods yet.

As The Times put it, "Even with a clean financial slate, questions remain about how Detroit can shift its fate, stop an exodus of taxpayers, and bring jobs and improvements to the hardest hit neighborhoods in a city with a footprint designed for a population that was once more than twice as many as the approximately 700,000 residents here now."

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Detroit's bankruptcy, the largest municipal bust in American history, is over after more than a year of proceedings, Michigan Gov. Rick Snyder declared Tuesday.
detroit, bankruptcy, ends, emergency
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2014-23-10
Wednesday, 10 Dec 2014 12:23 PM
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