(Bloomberg) – Detroit won approval of a debt- cutting plan that backers say will allow the one-time hub of the U.S. auto industry to exit its record $18 billion municipal bankruptcy and rebuild after decades of population decline and industrial decay.
The plan to eliminate $7 billion in debt is an "ideal model" for other distressed municipalities, U.S. Bankruptcy Judge Steven Rhodes announced in court today in granting his approval. "There is no more money available for creditors in the city's financial projection."
Detroit has enlisted charities, creditors and billionaires such as Quicken Loans Inc. founder Dan Gilbert to help rebuild, eliminate blight and prop up a beleaguered pension system. It still needs to address the deeper roots of its decline, according to Erik Gordon, a professor at the University of Michigan Ross School of Business.
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