Detroit exits largest municipal bankruptcy in US history

Detroit is formally exiting bankruptcy, marking the end of largest municipal bankruptcy in U.S. history, Michigan Gov. Rick Snyder announced Wednesday.

Snyder said during a news conference that the city's bankruptcy would officially end just after midnight, after the expected approval of paperwork on Wednesday. He thanked the city's emergency manager, Kevyn Orr, who implemented a two-year budget to eliminate $7 billion in the city's debt.

"We look forward, truly, to a better time for the city going forward," said Orr, who was hired by Snyder last year to take over the city's finances. "More importantly, it's time for me now to step back and return the city to its regular order."

Snyder and Orr, the attorney who handled automaker Chrysler's Chapter 11 filing, took Detroit into bankruptcy in July 2013 in a last-ditch effort to reorganize city finances after decades of population loss, declining tax revenue and growing debt.

The final plan came after months of negotiations with banks, bond insurers, unions and groups representing thousands of retirees. It's bolstered by 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.

"We're going to start fresh tomorrow and do the best we can to deliver the kind of services people deserve," said Duggan, appearing alongside Snyder and Orr on Wednesday.

Snyder said final paperwork had been filed, and he expected it to be formally approved by the court later Wednesday.

"The financial emergency in the city of Detroit will be defined as wrapping up today," Snyder said Wednesday.

Judge Steven Rhodes approved Orr's reorganization plan in November. A hearing is scheduled for Monday to deal with loose ends.

Wire services