Politics & Government
2:54 pm
Mon October 28, 2013

Facts about the Detroit bankruptcy

With the bankruptcy trial in full swing, we thought we'd share the following facts with you about the Detroit bankruptcy case.

 

  • State declares Detroit is in a “financial emergency” on March 1, 2013

  • Kevyn Orr appointed as Detroit’s emergency manager on March 14, 2013

  • City files for Chapter 9 bankruptcy on July 18, 2013

  • Debt owed is approximately $18 billion

    • $2.9 billion in government bond debt

    • $5.9 billion in Detroit Water and Sewerage Department debt

    • $3.5 billion in unfunded pension liability (Pension funds disagree with this figure. They say it’s much less.)

    • $5.7 billion unfunded retiree health care liability

  • Water and Sewerage debt ($5.9 billion) is “secured debt.” Lenders have a right to collateral, similar to a car loan or a mortgage.

  • The rest of the debt ($12.1 billion), including pension obligations, is considered “unsecured debt.” Similar to credit card debt, creditors holding this kind of debt are considered vulnerable to "haircuts" in bankruptcy

  • Detroit's Chapter 9 filing is the largest municipal bankruptcy filing in U.S. history by debt owed (Jefferson County, Alabama is 2nd at $4 billion)

  • Detroit is the largest city by population to file for Chapter 9 in U.S. history (Stockton, California is 2nd with a population of 298,000)

  • Detroit bankruptcy eligibility trial started on October 23, 2013

  • U.S. Judge Steven W. Rhodes is presiding over the bankruptcy case

  • The last day for Detroit to file a bankruptcy plan March 1, 2014, although Orr has said he intends to submit a plan by the end of 2013

  • Total annual revenue for City of Detroit in fiscal year 2012 was $2.3 billion

  • Total annual expenditures for City of Detroit in fiscal year 2012 was $2.6 billion

  • Number of City of Detroit employees is approximately 10,000

  • Number of retirees from the City of Detroit is approximately 19,000

  • Detroit’s population is 701,475 (2012)

  • Unemployment rate in Detroit 18.8% (July 2013)