Detroit bankruptcy moves forward as judge rules city can shed debt | Fox News
" Detroit's historic bankruptcy will move forward after a judge ruled Tuesday that the financially crumbling city is eligible to shed billions in debt.
Judge Steven Rhodes turned down objections from unions, pension funds and retirees, which all stand to lose big under any plan to address Detroit's long-term liabilities.
The decision Tuesday was long-awaited, and clears the way for the city to proceed in the largest public bankruptcy in U.S. history.
"This once proud and prosperous city can't pay its debts. It's insolvent. It's eligible for bankruptcy," Rhodes said in announcing his decision. "At the same time, it also has an opportunity for a fresh start."
The plan isn't on the judge's desk yet. The issue for Rhodes, who presided over a nine-day trial, was whether Detroit met specific conditions under federal law to stay in bankruptcy court and turn its finances around after years of mismanagement, chronic population loss and collapse of the middle class.
The city has argued that it needs bankruptcy protection for the sake of beleaguered residents suffering from poor services such as slow to nonexistent police response, darkened streetlights and erratic garbage pickup -- a concern mentioned by the judge during the trial.
Before the July filing, nearly 40 cents of every dollar collected by Detroit was used to pay debt, a figure that could rise to 65 cents without relief through bankruptcy, according to the city. "