Source: John W. Schoen / NBC News
With its bankruptcy filing, the city of Detroit has entered uncharted territory. It’s a dark place that no major U.S. city has ever gone — but that could change.
Despite the uncertainties surrounding what’s expected to be a hard fought legal battle, the outcome promises to inflict more pain on Detroit’s already-beleaguered city workers, residents, businesses, creditors and investors.
The case will also set a legal precedent that will be watched closely by other major cities across the country struggling under the weight of years of accumulated debt and underfunded pensions covering millions of public sector retirees.
“Everyone will say, ‘Oh well, it’s Detroit. I thought it was already in bankruptcy,’ ” said Michigan State University economist Eric Scorsone.
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