DETROIT (WWJ/AP) – Michigan Gov. Rick Snyder says Detroit’s bankruptcy is officially ending.
Snyder said during a news conference Wednesday that the nation’s largest municipal bankruptcy will end at midnight. He thanked the city’s emergency manager, Kevyn Orr, who implemented a two-year budget that eliminates $7 billion in the city’s debt.READ MORE: Belle Isle Park Reopens Giant Slide Friday
Orr, the attorney who handled Chrysler’s bankruptcy, was hired by Snyder last year to take over Detroit’s finances.
WWJ’s Vickie Thomas reported Orr appeared emotional as he spoke on his last day on the job.
“I reflect with a sense of bittersweet memory at this time,” Orr said. “It is time for the city to emerge from bankruptcy…but the fondness that I’ve developed in my heart for the city, for the citizens, for the two gentlemen behind me — both the governor and the mayor, as well as the city council — will remain.”
“We look forward, truly, to a better time for the city going forward,” he said. “More importantly it’s time for me now to step back and return the city to its regular order.”
Snyder and Orr took Detroit into bankruptcy on July 18, 2013, as a last-ditch effort to overcome decades of population loss, a chronic loss of tax revenue and piles of debt that couldn’t be managed.
The final plan came after months of negotiations with banks, bond insurers, unions and groups representing thousands of retirees. It’s bolstered by the so-called “Grand Bargain” — a unique promise of $800 million from foundations, major corporations and the state to soften pension cuts and prevent the sale of city-owned art.
Retirees who didn’t work for the police or fire departments will see a 4.5 percent pension cut by March and the elimination of annual cost-of-living payments.
Orr had extraordinary authority over Detroit government for 18 months before giving most of it back to Mayor Mike Duggan in September.READ MORE: Woodward Dream Cruise Kicks Off This Weekend: What To Know
After a two-month trial, Judge Steven Rhodes confirmed Orr’s reorganization plan on Nov. 7 — paving the way for Detroit to exit bankruptcy.
Snyder said Wednesday afternoon that the paperwork had been filed, and he expected it to be formally approved by the court later in the day.
“…The bankruptcy will wrap up today, Kevyn will wrap up today, and the emergency, financial emergency in the city of Detroit will be defined as wrapping up today,” the governor said.
“So it’s truly historic,” Snyder added, “and it really happened because of great partnerships — people working together — and that’s the biggest message of all of this.
Bankruptcy expert and University of Michigan law professor John Pottow gives Orr a lot of credit, especially for winning concessions from hedge funds and city pensioners.
“On the one hand you could say it’s really easy to do well because everyone expects it to be a disaster and a mess of a mound of chaos,” Pottow said. “So the fact that it wasn’t, I guess, is a sign of great success.”
But Pottow says only time will tell whether Detroit can attract enough business and residents to eventually stand on its own two feet and rise again.
A hearing is scheduled for Monday to deal with loose ends.Federal Judge Retains Jurisdiction In Lawsuit Over Enbridge Pipeline
TM and © Copyright 2014 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2014 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.