Detroit just entered the record books for all the wrong reasons. The city's emergency manager today filed what is the biggest municipal bankruptcy in the nation's history, reports the Detroit Free Press. The city is seeking Chapter 9 protection from creditors owed about $18.5 billion. (The exact figure varies, but that's a common estimate.) The first paragraph of the Detroit News story paints the big picture: Today's move culminates a "decades-long slide that transformed the nation’s iconic industrial town into a model of urban decline crippled by population loss, a dwindling tax base and financial problems."
Gov. Rick Snyder already has signed off on the move, calling it a tough but necessary decision to get Detroit back "on a solid financial footing." The city's financial troubles "have been ignored for too long," he said. Manager Kevyn Orr had previously warned that he'd file for Chapter 9 if negotiations with creditors and unions hit an impasse. If the bankruptcy goes through, it would likely take a year or longer for a federal bankruptcy judge to restructure the city's debt. One thing scaring retirees: Typically, such judges can ignore state law and slash pensions. (Read more Detroit stories.)