DETROIT — The city of Detroit’s historic Chapter 9 bankruptcy will end Wednesday, setting in motion a sweeping plan to slash $7 billion in debt and reinvest $1.4 billion over 10 years to improve city services.
Detroit emergency manager Kevyn Orr told reporters that the final paperwork required to allowed the city to emerge from bankruptcy will be completed by the end of the day Wednesday.
Judge Steven Rhodes approved the city’s restructuring plan in November, giving the city the authority to implement the grand bargain to help reduce pension cuts, preserve the Detroit Institute of Arts and start improving basic services.
The end of the bankruptcy also marks the end of Orr’s tenure. His resignation will take effect when the city emerges from bankruptcy Wednesday.
“I feel very fortunate to have had the opportunity and very fortunate for the outcome,” Orr said. “The reality is the city is moving forward and that gives me a great deal of pride and satisfaction.”
Gov. Rick Snyder appointed Orr in March 2013 to take over the city’s operations. Orr, a Washington, D.C., bankruptcy attorney, authorized the bankruptcy on July 18, 2013, and led restructuring talks with creditors.
“It’s truly historic,” Snyder said Wednesday. “It really happened because of great partnerships, of people working together.”
He added: “This has been an extremely difficult and hard process for many people, but people worked together. We have the city poised for a new chapter.”
Mayor Mike Duggan welcomed Orr’s exit. The mayor and City Council will regain control of the city following Orr’s exit, but they will report to a state oversight board called the Financial Review Commission.
The commission will have the power to reject Detroit’s spending and borrowing over the next decade.
“We’re better off today than we were 18 months ago,” City Council member Gabe Leland said.
