The Free Press, Mankato, MN

State, national news

July 19, 2013

Long-suffering Detroit finally turns to bankruptcy

Eds: Updates with details of the filing; comment from officials; background. An interactive highlighting key Detroit statistics and the PDF document of the bankruptcy filing is available. Will be updated following a 10 a.m. EDT news conference with Michigan Gov. Rick Snyder. With BC-US--Detroit Bankruptcy-My City; BC-US--Detroit Bankruptcy-News Guide; and BC-US--Detroit Bankruptcy-What's Next.

DETROIT (AP) — At the height of its industrial power, Detroit was an irrepressible engine of the American economy, offering well-paying jobs, a gateway to the middle class for generations of autoworkers and affordable vehicles that put the world on wheels.

But by Thursday, the once-mighty symbol of the nation's manufacturing might had fallen from that pinnacle into financial ruin, becoming the biggest U.S. city ever to file for bankruptcy — the result of a long, slow decline in population and auto manufacturing.

Although the filing had been feared for months, the path that lay ahead was still uncertain. Bankruptcy could mean laying off employees, selling off assets, raising fees and scaling back basic services such as trash collection and snow plowing, which have already been slashed.

Kevin Frederick, an admissions representative for a local career training school, called the step "an embarrassment."

"I guess we have to take a couple of steps backward to move forward," Frederick said.

Now city and state leaders must confront the challenge of rebuilding Detroit's broken budget in as little as a year.

Kevyn Orr, a bankruptcy expert hired by the state in March to stop Detroit's fiscal free-fall, said Detroit would continue paying its bills and employees.

But, said Michael Sweet, a bankruptcy attorney in Fox-Rothschild's San Francisco office, "they don't have to pay anyone they don't want to. And no one can sue them."

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