A federal judge has ruled that the city of Detroit should be protected from its creditors making it the first time in US history that a major city has been declared bust.
Detroit had filed for bankruptcy protection more than four months ago but a coalition including retired city employees sued to block it.
Dave Bing who is Mayor of Detroit was one of a team who wanted to avoid bankruptcy:
“I believe that since I came to office, with the crisis that we had, this was inevitable. I don’t think anybody necessarily wanted to go in this direction, but now that we are here, it’s more important that we work together as opposed to continuing to fight each other.”
“While we are very pleased, we remain very concerned about the need to adjust the city’s debt, to improve its level of services for its citizens and to also prepare for the city to exit this receivership in a fashion that restores democracy,” said State appointed emergency manager, Kevyn Orr.
Detroit, once a major car-making city has been in decline for years. Public employees had feared the judges ruling as their pensions are likely to be threatened.