Bankruptcy: Troubled Detroit defaults on debt

CHICAGO: The troubled city of Detroit defaulted on its debt payments Friday as it threatened to become the United State’s (US) largest ever municipal bankruptcy. With the ‘Motor City’ struggling to provide basic services to a shrinking population, its state-appointed emergency manager submitted a restructuring plan to holders of some $18.5 billion in IOUs. The city imposed a moratorium on some debt payments effective Friday in order to preserve the cash needed for essential services. Kevyn Orr, the bankruptcy expert appointed by Michigan’s governor to straighten out the city’s troubled finances told reporters there is a “50-50” chance that Detroit will declare bankruptcy and that a decision on the restructuring should happen in the next 30 days. The restructuring proposal addresses how it will meet its obligations on about $7 billion in secured debt and $11.5 billion in unsecured borrowings.

Published in The Express Tribune, June 16^th, 2013.

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