Detroit eligible for bankruptcy, judge rules

Detroit is eligible to shed billions in debt in the largest public bankruptcy in US history, a judge said in a long-awaited decision that shifts the case toward how the city will accomplish that task.

Judge Steven Rhodes turned down objections from unions, pension funds, and retirees, which, like other creditors, could lose under any plan to solve $18bn (€13.2bn) in long- term liabilities. But that plan isn’t on the judge’s desk yet.

The issue for Rhodes was whether Detroit met specific conditions under federal law to stay in bankruptcy court and turn its finances around after years of mismanagement, chronic population loss, and collapse of the middle class.