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Major US City Files for Bankruptcy

Detroit, in the U.S. state of Michigan, has become the largest city in U.S. history to file for bankruptcy, a move that gives it court protection from creditors.

A fiscal manager hired by the state made the filing Thursday in federal bankruptcy court.

Detroit Mayor Dave Bing said he hopes the move will mark a new beginning for the city, which has been struggling with a budget deficit of more than $300 million and long-term debt of nearly $14 billion.



"This is very difficult for all of us but if it's going to make the citizens better off, then this is a new start for us."



Michigan Governor Rick Snyder still needs to sign off on the decision. In March, Snyder hired fiscal manager and bankruptcy expert Kevyn Orr to oversee Detroit's troubled finances, making it the largest U.S. city under state supervision.

Declaring bankruptcy casts doubt about the future of public employee pensions and health care plans in Detroit, which has about 10,000 city employees.



In the early 1950s, the city's population was 1.8 million. By 2010, it was down to around 700,000, with people fleeing the city amid racial tensions and declining job opportunities.

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