Posted by feww on July 19, 2013
Detroit becomes largest U.S. city to file for bankruptcy
The city of Detroit, a metonym for the American automobile industry, has become the largest city in U.S. history to file for bankruptcy, with debts of up to $20bn.
Since January 2010, at least eight cities, towns and counties have filed for Chapter 9 bankruptcy protection in a federal court. The list includes Boise County (Idaho), Stockton, Mammoth Lake and San Bernardino (California), Jefferson County (Alabama), Harrisburg (Pennsylvania), Central Falls (Rhode Island) and Detroit (Michigan).
“The fiscal realities confronting Detroit have been ignored for too long. I’m making this tough decision so the people of Detroit will have the basic services they deserve and so we can start to put Detroit on a solid financial footing that will allow it to grow and prosper in the future,” said Michigan Gov. Rick Snyder. “This is a difficult step, but the only viable option to address a problem that has been six decades in the making.”
“It is clear that the financial emergency in Detroit cannot be successfully addressed outside of such a filing, and it is the only reasonable alternative that is available,” Snyder said in the letter authorizing Detroit’s emergency manager to seek federal bankruptcy protection for the City. “In other words, the City’s financial emergency cannot be satisfactorily rectified in a reasonable period of time absent this filing.”
Detroit population has shrunk from over 2 million in the 1950s to about 713,000 in 2011. The city reported the highest violent crime rate among all major US cities, with more than 15,000 reported crimes in 2011.
The public services are in a state of near collapse. About 80,000 properties are abandoned or condemned, with only 53% of owners paying their 2011 property taxes.
After 60 years of decline, large parts of the City can only improve by being razed to the ground.
- San Bernardino. The city of San Bernardino became the third California city in two weeks to file bankruptcy protection in the face of a $45-million budget shortfall, reports said.
- Atwater. The small Central California city of Atwater (Pop: ~28,000) has declared A fiscal emergency, which could translate to the state’s fourth municipal bankruptcy this year, said a report.
- North Las Vegas, Nevada. The Nevada city of North Las Vegas, described as “ground zero for foreclosures” was officially declared as a disaster area on June 23.
- Court Rules Stockton, Calif., to Enter Bankruptcy April 2, 2013
- Dissolving Detroit! December 1, 2012