Detroit on its way out of bankruptcy after eliminating $7 billion of debt

Judge approves plan to get Motor City back on its feet.

Last July, Detroit became the largest US city ever to file for bankruptcy, with Michigan governor Richard Snyder calling it “a low point in the city’s history [but also] the foundation of the city’s future.” Happily, a federal judge has now approved a bankruptcy exit plan to save the home of Motown and techno.

As part of the deal, the city is eliminating $7 billion worth of debt and cutting pension payments to its retired workforce. The plan also includes $1.7 billion over the next decade to cover critical issues, like demolishing the city’s numerous abandoned homes and procuring new fire trucks and ambulances.  Judge Steven Rhodes approved the plan, saying it “borders on miraculous”.

The exit plan also includes an unusual deal designed to save the Detroit Institute of Arts while minimising cuts to pensions, reports Slate. The art museum, which is owned by the city, had been told it needed to sell off some of its valuable paintings by Rembrandt, Van Gogh and Matisse, in order to contribute $500 million to paying off the city’s debts. Instead it went on a huge fundraising drive and raised over $800 million, so Detroit gets to keep its art collection.

The former industrial centre suffered years of decline as its factories and car plants closed down one by one, but Detroit’s abandoned buildings are increasingly being seen as an opportunity by entrepreneurs like Dimitri Hegemann, the owner of Berlin’s Tresor, who wants to turn the decrepit Fisher Body 21 building into a techno club.

At the beginning of the year, FACT’s Laurent Fintoni journeyed to Detroit to see what’s bubbling up in the city’s underground music scenes, meeting five exciting new acts along the way. Also of interest: watch Carl Craig introducing the people, places and music of his home town.

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