The city of Detroit is said to be making the final preparations to file for federal bankruptcy, or Chapter 9 protection, and could submit paperwork as early as Friday morning, according to the Detroit Free Press.
Detroit will now become the largest city in American history to file for bankruptcy. Kevin Orr, a bankruptcy expert hired by the state of Michigan in March to try and lead the Motor City away from a fiscal cliff, submitted the filing on Thursday, reports the AP.
On the same day, Michigan governor Rick Snyder laid out the case in support of Chapter 9 protection, saying that the “decision comes in the wake of 60 years of decline for the city."
Snyder said that despite the “best efforts” by Detroit’s Office of the Emergency Manager, the city was unable to reach a restructuring plan with its debtors - leaving more than $18 billion in outstanding debts.
"We must face the fact that the city cannot and is not paying its debts as they come due, and is insolvent,” added Snyder.
The city of Detroit lost a quarter-million residents between 2000 and 2010, reports the AP. Boasting a population of 1.8 million in the 1950s, the municipality is now struggling to stay above 700,000 residents. An estimated 78,000 structures are currently abandoned in the city and unemployment has tripled since 2000 and, at roughly 15 percent of the population, is currently double the national average.
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