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Has Detroit’s Bankruptcy Case Come to an End?

Has Detroit’s Bankruptcy Case Come to an End?

: Richard West Law Office

bankruptcyIn July of 2013, the city of Detroit, Michigan, filed for bankruptcy. The city had accumulated $18-20 billion in debt, the highest municipal debt in the history of the country. While an initial court ruling said that Detroit was ineligible for bankruptcy because of the city’s constitution, it was later found that Detroit could file for Chapter 9 bankruptcy for $18.5 billion. Over the next year and a half the city developed a restructuring plan of adjustment, which was confirmed by judge Steven W. Rhodes in November. On December 11, the city was declared to have officially exited Chapter 9 bankruptcy, becoming the largest city in the history of the country to do so.

There were a multitude of hurdles preventing the city from exiting bankruptcy, and it seemed for months that every week brought a new tale of woe from the city. One of the most absurd struggles the city faced was discovered when bankruptcy court took a closer look at some of the fees assessed by lawyers hired by the city. The city was charged hundreds of dollars an hour for “media monitoring,” for example, which was little more than lawyers watching the news and social media. The fees reached $144.3 million by the end of October, and were fully expected to exceed $200 million.

Fortunately for Detroit, the bankruptcy court waived those fees, allowing the city to finally emerge from bankruptcy without $200 million in legal fees lying in wait. After a long, hard battle, the bankruptcy case in Detroit is finally over