Detroit moves closer to possible bankruptcy

How many Detroit City workers does it take to open
a water main? 2 to turn the wrench and 5 to watch.

Detroit's emergency manager plans to call unions and creditors to a meeting in mid-June amid signs he is laying the groundwork to take the city into bankruptcy within a matter of months. 

Kevyn Orr, appointed by Michigan Gov. Rick Snyder in March to take control of the long-struggling city, plans to use the meeting to present a detailed restructuring plan for Detroit's liabilities, which he says total about $17 billion.

Over the coming weeks, Mr. Orr is expected to ask the city's largest unions, pension funds, creditors and bondholders for concessions. It is unclear whether such moves could stave off bankruptcy—or pave the way for it by serving as a template for a court-supervised reorganization.

A bankruptcy filing likely would be the largest ever by a U.S. municipality in terms of debt outstanding, surpassing that of Jefferson County, Ala. It would follow a decades-long decline of the onetime industrial power, whose population fell 25% from 2000 to 2010 to about 700,000, according to the Census Bureau. In 1950, Detroit crested at nearly two million people.

How bad is it?

Detroit had $64 million cash on hand in April but owed $226 million in payments on pensions and other obligations, forcing the city to delay paying its bills to stay afloat, Mr. Orr wrote in a report last month.

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