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Wednesday 27 August 2014

Detroit city files for bankruptcy

Published 18/07/2013 | 21:47

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Detroit lost a quarter of a million residents between 2000 and 2010 (AP)

Detroit has become the largest city in US history to file for bankruptcy.

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State-appointed emergency manager Kevyn Orr has asked a federal judge for permission to place the city into Chapter 9 bankruptcy protection.

If approved, the filing would allow Mr Orr to liquidate city assets to satisfy a host of creditors and city pensioners lined up to recoup losses from bad bond investments and unpaid contracts.

A number of factors - most notably steep population and tax base falls - have been blamed on Detroit's tumble towards insolvency.

Detroit lost a quarter of a million residents between 2000 and 2010.

Mr Orr was unable to convince enough creditors, bondholders and employee pension representatives to accept pennies on the dollar as he attempted a fiscal restructuring of Detroit.

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