Today marks the ending of the largest public bankruptcy filing in U.S. history. Judge Steven Rhodes announced his decision from the bench approving Detroit’s plan to get out of bankruptcy, launching Detroit into a turnaround.
Here’s what the bankruptcy has meant for Detroit — and where its turnaround stands via WDIV:
- Detroit will shed most of the $11 billion in debt. Emergency Manager Kevyn Orr, who has overseen city finances for most of the past two years, has reached deals with just about all of the city’s creditors.
- It will have $1.5 billion to spend over the next 10 years to improve essential services. That includes investments in police, fire and sanitation departments. The city will also fix its fleet of 88,000 street lights, 40% of which are broken.
- Other federal funds will be used to remove the blighted buildings that occupy much of the city.
- The worst-case scenarios avoided for city employees and retirees.
- Pension payments to the city’s 23,000 retirees were trimmed, but not slashed.
- Civilian employees had their benefits reduced 4.5% and they lost their cost of living increases.
- Police and fire department retirees only had to give up half their cost of living increases.
- The retirees voted overwhelmingly to accept the cuts.
- The state of Michigan and various private foundations and companies stepped up with hundreds of millions of dollars of assistance to save the retirees from deeper benefit cuts.
- Donations also allowed the Detroit Institute of Arts to avoid selling off its artwork, as some creditors demanded.
- The city has enjoyed something an economic turnaround during the reorganization process, helped by a rebound in auto sales and a boom in office and apartment construction in the downtown area.
The city spent nearly $90 million in fees to attorneys, accountants and other professionals on the bankruptcy case through the end of June, with tens of millions more in bills yet to come.