The city of Detroit has filed for Chapter 9 federal bankruptcy protection making it the largest city in U.S. history to declare bankruptcy. We are updating this post as we learn more information. To see how the story unfolded scroll down and read up.
Final update on this post - 3:08 p.m.
And here we go - the beginning of a long line of likely court battles after the city of Detroit attempts to move through federal bankruptcy protection.
Today, Ingham County judge Rosemary Aquilina issued orders saying Detroit's bankruptcy filing violates the state constitution. More from the Detroit Free Press:
In a spate of orders today arising from three separate lawsuits, Aquilina said Gov. Rick Snyder and Detroit emergency manager Kevyn Orr must take no further actions that threaten to diminish the pension benefits of City of Detroit retirees.
State Attorney General Bill Schuette moved quickly and said he will appeal the judge's decision. He plans to ask the Michigan Court of Appeals to grant a stay of that order.
Detroit Emergency Manager Kevyn Orr and Gov. Snyder held a press conference this morning to discuss the Chapter 9 bankruptcy filing for Detroit with the press. They both stressed that for the people of Detroit, "it's business as usual."
"Going forward...we will pay our bills," Orr said. He said priority will be given to those expenses relating to health, safety, and welfare.
Orr said that "bankruptcy is a tool in our toolbox" and the process gives him a chance to implement a plan that he laid out on June 14.
"It gives us breathing room," Orr said. "We were getting sued on a weekly basis." Two Detroit pension boards filed suit to try to stop federal bankruptcy proceedings. The action prompted Orr and Snyder to push up the timing of the filing.
Orr told reporters that he asked for a "consensual process" with creditors and interested parties, "but that didn't happen."
Orr was asked "what shocked him most?" when he first opened Detroit's books. Orr replied it was the normalcy of the practice of continual borrowing in the face of mounting debt in Detroit that struck him most.
"What shocked me wasn't the numbers," he said. "What shocked me was the tolerance for this behavior for decades...I wish there had been a lot more outrage over the past ten to twenty years."
Orr referred to his short tenure as emergency manager to deal with Detroit's debt problem. "We're dealing with 60 years of deferred maintenance in 18 months. I can't afford to spend time running in place to fix the problems I'm here to address," he said.
Orr mentioned a list of mounting problems in Detroit as reason to take drastic action - children walking home in the dark after school because street lights don't work, "40 year-old trees" growing out of dilapidated buildings, and slow police response times.
"I recognize [Chapter 9 bankruptcy] is a lever, but we are trying hard to be fair."
Orr said they are looking for an entity to represent retirees in the bankruptcy proceedings, something he said some unions were unwilling to do.
Gov. Snyder became animated when talking about the Chapter 9 filing.
"Now is our opportunity to stop 60 years of decline. This is fundamental... how long has this ...we are doing something. This is forum. This is the place to do it in. This is the place to address the debt question...we will come out with a stronger, better Detroit." Gov. Snyder said. Snyder said not only do the citizens of Detroit deserve an improved city, but the people of Michigan deserve it as well.
At 10:00 a.m., Gov. Snyder and Detroit Emergency Manager Kevyn Orr will hold a press conference on the Detroit bankruptcy filing.