The City of Detroit’s historic bankruptcy case is now closed. U.S. Bankruptcy Court Judge Thomas Tucker on Tuesday afternoon granted the city’s motion requesting a Final Decree closing the Chapter 9 bankruptcy case, effectively ending the court’s supervision over Detroit. The closure marks the end of a transformative journey that began in July 2013 when Detroit, under a state-appointed emergency manager, filed for bankruptcy.
“I want to thank our financial and legal teams for their hard work making this day possible. Detroit continues to show that it has its financial house in order and in fact has become a model city for effective and responsible fiscal management,” Detroit Mayor Mary Sheffield said, citing the city’s 12 consecutive balanced budgets and surpluses, reserve funds totaling more than $500 million and a return to investment grade status among creditors.
“I would be remiss if I didn't acknowledge the critical role the sacrifices of our retirees played in the city’s ability to emerge from bankruptcy and embark upon the road to recover. We owe them a great debt of gratitude,” Sheffield added.
The action was made possible after the city began a final distribution of about $10 million to claimants, which represents accrued interest on Class 14 B notes, the financial recovery bonds given to unsecured creditors, who were among the last to get repaid at least a portion of what they were owed. In all, the bankruptcy process allowed the city to shed approximately $7 billion in debt and to restructure another $3 billion in debt, freeing up about $150 million per year to spend on city services.
The case closing signals that the city is successfully implementing the terms of its Plan of Adjustment (POA), managing its post-bankruptcy obligations, including the resumption of legacy pension payments and has established a sustainable path for long-term fiscal stability. Fiscal Year 2027 will be the fourth year Detroit has made its pension contribution supplemented by the Grand Bargain and the city’s Retiree Protection Fund.
Chief Financial Officer Tanya Stoudemire notes: “The closure represents the last step in a journey that has required discipline and sacrifice. We are signaling to the world that Detroit is once again a self-sustaining city with the financial maturity to manage its own future. Our team remains focused on the rigorous, long-term fiscal management necessary to protect our retirees and ensure our residents never face this kind of financial uncertainty again.”
Since exiting active bankruptcy oversight in 2014, Detroit has achieved multiple consecutive balanced budgets and surpluses along with significant credit rating upgrades, proving its ability to maintain financial health while delivering essential services to Detroiters.
“I want to thank our financial and legal teams for their hard work making this day possible. Detroit continues to show that it has its financial house in order and in fact has become a model city for effective and responsible fiscal management,” Detroit Mayor Mary Sheffield said, citing the city’s 12 consecutive balanced budgets and surpluses, reserve funds totaling more than $500 million and a return to investment grade status among creditors.
“I would be remiss if I didn't acknowledge the critical role the sacrifices of our retirees played in the city’s ability to emerge from bankruptcy and embark upon the road to recover. We owe them a great debt of gratitude,” Sheffield added.
The action was made possible after the city began a final distribution of about $10 million to claimants, which represents accrued interest on Class 14 B notes, the financial recovery bonds given to unsecured creditors, who were among the last to get repaid at least a portion of what they were owed. In all, the bankruptcy process allowed the city to shed approximately $7 billion in debt and to restructure another $3 billion in debt, freeing up about $150 million per year to spend on city services.
The case closing signals that the city is successfully implementing the terms of its Plan of Adjustment (POA), managing its post-bankruptcy obligations, including the resumption of legacy pension payments and has established a sustainable path for long-term fiscal stability. Fiscal Year 2027 will be the fourth year Detroit has made its pension contribution supplemented by the Grand Bargain and the city’s Retiree Protection Fund.
Chief Financial Officer Tanya Stoudemire notes: “The closure represents the last step in a journey that has required discipline and sacrifice. We are signaling to the world that Detroit is once again a self-sustaining city with the financial maturity to manage its own future. Our team remains focused on the rigorous, long-term fiscal management necessary to protect our retirees and ensure our residents never face this kind of financial uncertainty again.”
Since exiting active bankruptcy oversight in 2014, Detroit has achieved multiple consecutive balanced budgets and surpluses along with significant credit rating upgrades, proving its ability to maintain financial health while delivering essential services to Detroiters.
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