Detroit files for bankruptcy

Last updated 05:00 26/07/2013

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Detroit has become the largest city in US history to file for bankruptcy.

State-appointed emergency manager Kevyn Orr has asked a federal judge permission to place the city into Chapter 9 bankruptcy protection.

If approved, the filing would allow Orr to liquidate city assets to satisfy a host of creditors and city pensioners lined up to recoup losses from bad bond investments and unpaid contracts.

A number of factors - most notably steep population and tax base falls - have been blamed on Detroit's tumble toward insolvency.

Detroit lost 250,000 residents between 2000 and 2010.

Orr was unable to convince enough creditors, bondholders and employee pension representatives to accept pennies on the dollar as he attempted a fiscal restructuring of Detroit.

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- AP

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