Detroit files for Chapter 9 bankruptcy amid staggering debts

The City of Detroit filed this afternoon for Chapter 9 bankruptcyprotection in federal court, laying the groundwork for a historic effort to bail out a major U.S. city that is sinking under billions of dollars in debt and decades of mismanagement, population flight and loss of tax revenue.

The filing begins a 30- to 90-day period that will determine whether the city is eligible for Chapter 9 protection and define how many claimants might compete for the limited settlement resources that Detroit has to offer. The bankruptcy petition would seek protection from creditors and unions who are renegotiating $18.5 billion in debt and other liabilities.

http://www.freep.com/article/20130718/NEWS01/307180107/Detroit-prepares-file-bankruptcy-soon-Friday

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