Federal bankruptcy Judge Steven Rhodes has approved Detroit's plan to exit bankruptcy. Rhodes' ruling comes after several major creditors reached deals with the city in recent weeks.
The ruling clears the way for the city to shed around $7 billion in debt.
More from the Detroit News:
The approval by U.S. Bankruptcy Judge Steven Rhodes pushes Detroit near the end of the biggest municipal bankruptcy case in U.S. history. His decision comes 15½ months after Detroit filed a bankruptcy petition triggered by population loss, a dwindling tax base, corruption, mismanagement and financial problems. Rhodes also approved a slew of deals negotiated on the sidelines of the bankruptcy case with creditors including bondholders and bond insurers. He immediately announced the historic ruling before reading his justification for approving the debt-cutting plan.
When the city's former state-appointed emergency manager took the job of overseeing the city and its finances a year and a half ago, he called fixing Detroit's finances, "the Olympics of restructuring." Detroit's bankruptcy is the largest such bankruptcy in U.S. history.
The speed with which the city moved through the bankruptcy process surprised many. The city filed Chapter 9 bankruptcy in July 18, 2013. The city will exit bankruptcy around 16 months after this filing.
More from the New York Times:
Many bankruptcy experts had predicted that the closely watched litigation would take months or even years longer, as it has in smaller cities and counties. Vallejo, Calif., spent nearly three years in bankruptcy. Stockton, Calif., just got permission to emerge after 27 months. And Jefferson County, Ala., which spent a little more than two years in bankruptcy, now faces more litigation a year after its case was supposed to have ended.
Once the city exits bankruptcy, it will be able to borrow money to improve city services.
Matt Helms and Nathan Bomey of the Detroit Free Press report the reinvestment plan in Detroit amounts to $1.7 billion over the next 10 years:
Core to plan of adjustment is a $440-million blight removal initiative, a $274-million investment in police, and a $156-million investment in the Fire Department. The $1.4-billion reinvestment initiative includes $483 million in anticipated new revenues, which would come from higher bus fares and improved tax collection. The city is also projecting $358 million in cost savings from establishing a more efficient city government, which could theoretically make the reinvestment plan $1.7 billion.
We'll have more on the judge's ruling later today.
Michigan Radio's Sarah Cwiek live-tweeted today's ruling. You can read her tweets here:
