Judge approves bankruptcy exit plan for Detroit

DETROIT (AP) — A judge today approved Detroit's plan to get out of bankruptcy, ending the largest public filing in U.S. history and launching the city into a turnaround that will require discipline after years of corruption, budget-busting debt and an exodus of residents.

Detroit is cutting the pensions of general retirees by 4.5 percent, erasing $7 billion of debt and promising to spend $1.7 billion to demolish scores of dead buildings, improve public safety and upgrade basic services, among other key steps.

Judge Steven Rhodes announced his decision from the bench, just seconds after entering court. He told the audience, including Mayor Mike Duggan in the front row, to be prepared for a long explanation.

The case concluded in just under 16 months, lightning speed by bankruptcy standards. The success was largely due to a series of deals between Detroit and major creditors, especially retirees who agreed to accept smaller pension checks after the judge said they had no protection under the Michigan Constitution.

No significant critics were left by early October. Bond insurers with more than $1 billion at stake repeatedly argued for the sale of valuable art but dropped that plea and settled for much less.

It took more than two years for a smaller city, Stockton, California, to get out of bankruptcy. San Bernardino, a California city even smaller than Stockton, still is operating under Chapter 9 protection more than two years after filing.