Detroit, Michigan News: Federal Judge Expected to Decide on Plan to Rebuild City Following Its $18B Debt
A federal judge is expected to make a ruling Friday on Detroit's plan to rebuild after its municipal bankruptcy filing, the nation's largest-ever.
Judge Steven W. Rhodes of the Unites States Bankruptcy Court for the Eastern District of Michigan was scheduled to present from the bench Friday afternoon with his decision. It is expected that Rhodes will accept Detroit's proposed plan.
The acceptance of this suggested plan would mean an end to more than 15 months of court protections for Detroit. The struggling city accumulated roughly $18 billion of debt before it filed for bankruptcy in July 2013. By the time it filed its for financial reconsolidation, Detroit was facing multiple budget deficits, a lack of civic services and a steady stream of people and investors leaving the area.
Under the plan, the city would be able resolve $7 billion of that debt and invest in neglected city services. In breaking down some of the proposal's components, it sets aside $1.7 billion over the course of the next 10 years to remove buildings in disrepair, buy fire trucks and ambulances and upgrade the city's computer systems.
Lawyers, experts and other associated bankruptcy costs will cost the city $150 million, according to city officials.
The historic ruling is really more of a court-imposed deal rather than a plan. The plan for managing the city moving forward has been largely agreed upon by the major parties involved in Detroit, which include the city's retired workers groups, banks and bondholders, according to The New York Times.
However, Rhodes ruling will bring the trial, which heard all of the objectors to the restructuring plan created by Detroit's emergency manager Kevyn Orr, to a close. The proceedings lasted 24 days, and featured 2,327 exhibits, 41 witnesses and 46 individuals with concerns. The only remaining objectors include more than 600 people and business contractors who sued the city and settled before the bankruptcy.
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