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News Link • Economy - Economics USA

Detroit May File For Bankruptcy Overnight

 But fear not: the Detroit bankruptcy, like rising rates, are entirely due to the economic recovery.

The City of Detroit is in final preparations to file for federal bankruptcy as early as Friday morning, several sources told the Free Press today.

 The filing would begin a 30- to 90-day period that will determine whether the city is eligible for Chapter 9 protection and define how many claimants might compete for the limited settlement resources that Detroit has to offer. The bankruptcy petition would seek protection from creditors and unions who are renegotiating $18.5 billion in debt and other liabilities.

 Detroit Emergency Manager Kevyn Orr, who in June released a plan to restructure the city's debt and obligations that would leave many creditors with much less than they are owed, has warned consistently that if negotiations hit an impasse, he would move quickly to seek bankruptcy protection.

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