Michigan Gov. Rick Snyder praised city and state leaders for working together on a 16-month effort to negotiate Detroit’s exit from bankruptcy, which a federal judge approved on Friday.
“Detroit’s journey is far from over,” Snyder said. “But there is no mistaking that Michigan’s largest city is stronger. Its brightest days are to come.”
The plan cuts approximately $7 billion from the city’s estimated $18 billion in long-term debt and reinvests $1.7 billion into restoration of city services, including the hiring of 200 police officers and 100 firefighters.
“People will long remember that when Detroit arrived at this troubling hour, its residents and leaders – with supporters statewide – started to pull together as one,” Snyder said. “Our state has rallied around its largest and iconic city. It is no longer Detroit vs. Michigan, but the embracing of Detroit, Michigan.”
Federal Judge Steven Rhodes’ confirmation of Detroit’s plan of adjustment ends the United States’ largest municipal bankruptcy. Under the agreement, some creditors will be paid as little as 14 cents on the dollar and city pension payments were reduced by 4.5 percent, along with other concessions.
Synder noted – and thanked – a group of business and philanthropic groups that alleviated those pension cuts by raising nearly $1 billion to place the city-owned Detroit Institute of Arts under control of an independent charitable trust.
“Much work remains, but we are resolved to continue moving forward collaboratively,” Snyder said. “Our goal is to restore the vitality of this great city from downtown through the neighborhoods, with the quality of life that Detroit’s families deserve. We won’t settle for anything less.”