Markets 
Detroit’s historic bankruptcy case — the largest municipal bankruptcy in U.S. history — has officially closed more than 13 years after the city first sought Chapter 9 protection amid a financial collapse that reshaped the city’s finances, pensions and long-term fiscal strategy.
U.S. Bankruptcy Judge Thomas Tucker granted the city’s motion for a final decree this week, formally ending the case after determining administration of the bankruptcy had been completed.
The closure marks the end of a years-long restructuring effort that eliminated roughly $7 billion in debt and restructured another $3 billion, according to the city, freeing up an estimated $150 million annually for city services.
SPIRIT AIRLINES LAWYER SAYS JET FUEL PRICE SURGE LEFT CARRIER WITH ‘NO REMAINING WAY OUT’ OF BANKRUPTCY
Mayor Mary Sheffield called the milestone evidence that Detroit “has its financial house in order,” pointing to 12 consecutive balanced budgets and surpluses, reserve funds topping $500 million and the city’s return to investment-grade status.
The formal closure also comes as major credit-rating agencies have highlighted Detroit’s improved fiscal position.
One day before the bankruptcy case officially closed, S&P Global Ratings upgraded Detroit’s general obligation bond rating to BBB+ from BBB, citing the city’s “sustained strong financial performance and governance conditions.”
Moody’s similarly said Detroit had strengthened its “financial resiliency” in recent years, citing strong reserves and improved fiscal management since emerging from bankruptcy in 2014.
MAJOR US CITY OFFERS CASH INCENTIVES TO SPARK GROWTH, ATTRACT NEWCOMERS
Still, both ratings agencies warned the city remains vulnerable to broader economic pressures tied to the automotive sector, inflation and long-term pension obligations.
The closure came after Detroit completed a final distribution of roughly $10 million tied to accrued interest on “Class 14 B notes,” financial recovery bonds issued to unsecured creditors during the restructuring.
Detroit filed for bankruptcy in July 2013 under a state-appointed emergency manager after years of population decline, shrinking tax revenues and rising pension liabilities pushed the city into insolvency.
CLICK HERE TO GET FOX BUSINESS ON THE GO
The city officially exited bankruptcy in late 2014 under a restructuring plan that became a national case study in municipal financial recovery.
Read the full article here
