[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].

When the city of Detroit filed for Chapter 9 bankruptcy [JURIST backgrounder] last July the city gained the dubious distinction of becoming the largest bankruptcy by a local government in US history. In June three UN rights experts condemned the city of Detroit’s Water and Sewage Department disconnection of water services [JURIST report] for failure to pay due to lack of means as a violation of human rights. The on-going water shut-off by Detroit’s heavily-indebted water and sewer system has been linked to Detroit’s broader bankruptcy proceedings [ThinkProgress report]. In February Michigan Governor Rick Snyder unveiled a new state budget [JURIST report] that would allocate state funds to be used to cover Detroit workers’ pensions. Also in February Detroit filed a lawsuit [JURIST report] to invalidate USD $1.44 billion of pension debt.