US bankruptcy judge approves Detroit debt plan

[JURIST]

The US Bankruptcy Court for the Eastern District of Michigan [official website] approved [opinion, PDF] a plan on Friday to resolve Detroit's seven billion dollars of debt and return the city to solvency. The plan includes settlements regarding post-employment benefits claims, tax obligations, insurance, and "the Grand Bargain" which comprised the pension settlement, the State Contribution agreement and the Detroit Institute of Arts settlement. The deal was reached after months of private mediation sessions between most of the groups involved [NYT report], with the hope of reducing the likelihood of a protracted court battle and years of appeals. Judge Steven W. Rhodes concluded that the plan to reduce the city's debt and invest in city services was fair, feasible and in the best interest of its creditors [Detroit News report].