Breaking News – Federal Judge Says Detroit Meets the Criteria to File Chapter 9 Bankruptcy

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Detroit, MI is about to become the largest city in American history to file for Chapter 9 Bankruptcy, reports The Washington Post.

Detroit, formerly known as Motor City, USA, was once the considered the capital of the American auto industry.  Now, after 60 years of Liberal mismanagement and corruption, it’s a shadow of its former glory.

Detroit once boasted 1.8 million residents.  Today, it has fewer than 713,000 according to the 2010 Census.

The city owes roughly $18 billion in debts and liabilities to over 100,000 creditors. 

Today, City Manager, Kevin Orr, told Federal Bankruptcy Judge, Steven Rhodes, that the city already pays 45 cents of every dollar earned to pay down those debts and assured the judge that without a ruling in the city’s favor, 45 cents would soon climb to 65 cents.

Judge Rhodes decided that Detroit does meet the criteria to file for bankruptcy and earn some respite from its 100,000+ creditors, stating:

“This once proud and prosperous city can’t pay its debts. It’s insolvent. It’s eligible for bankruptcy…At the same time; it also has an opportunity for a fresh start.”

Mr. Orr has been appointed by the federal court to work with the judiciary to monitor spending during the bankruptcy and begin to repay creditors at a slower rate while also continuing the city’s social programs.

By the way, Detroit still wants to spend $450 million building a new hockey arena for the Detroit Red Wings to replace the perfectly functional Joe Lewis Arena.

That effort has is backed by the Michigan Governor, Rick Snyder, who says the state is willing to support the construction with bonds in order to attempt to generate revenue for Detroit.