The city of Detroit will be able to borrow $120 million to combat crime and blight after a federal judge approved the municipality's first fundraising since filing for bankruptcy protection.
U.S. Bankruptcy Judge Steven Rhodes said Wednesday that he approved the
city's borrowing from Barclays Capital, a subsidiary of Barclays PLC, to
buy new police and firefighting vehicles, among other purchases,
because of the urgent need to improve city services.
Detroit "is not providing the basic services to meet the basic needs of its citizens," the judge said.
Last July, Detroit became the largest city in the country to seek
Chapter 9 bankruptcy protection, with the aim of restructuring more than
$18 billion in long-term obligations.
The city is backing up the borrowing through income-tax revenue and the
future sale of assets. Creditors had questioned the need for a new loan
in a city where risky borrowing was seen as a driving force behind the
bankruptcy.
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