Detroit Files for Bankruptcy

Trying to pay for stuff you can’t afford will do that to you:

It’s the largest municipal bankruptcy in U.S. history, dwarfing Jefferson County, Ala.’s $3.1 billion sewage district restructuring.

In June 2012, the City of Stockton became the largest-ever city to file for bankruptcy, at the time.

The Motor City faces $20 billion of long-term liabilities. The Wall Street Journal’s Matt Dillon says those holding onto $11 billion in unsecured debt are basically staring into the abyss, facing the prospect of getting next to nothing from the city’s obligations.

The pension funds want to block Orr’s attempt to drastically reduce the amount of benefits owed to current and former city workers.

Pension funds for unionized city employees are one of the reasons Stockton went bankrupt.

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