The city of Detroit filed for federal bankruptcy protection on Thursday afternoon, making the automobile capital and
one-time music powerhouse the country's largest-ever municipal bankruptcy case.
The case filed in U.S. District Court for the Eastern District of Michigan came after Kevyn Orr, the emergency
manager, failed to reach agreements with enough of the bondholders, pension funds and other creditors to restructure
Detroit's debt outside of court. The final decision rested with Republican Gov. Rick Snyder, who had appointed Mr. Orr
as Detroit's overseer in March.
It was expected that the city would report long-term liabilities close to $20 billion. The city's assets were less
clear, but Mr. Orr had called the city functionally insolvent and recently missed a payment to the city's pension system
of nearly $40 million.
The financial outlook has never been bleaker for the Motor City, which has shrunk from its peak of nearly two million
people in 1950 to 700,000 today.