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US Bankruptcy Court Approves $1.7 Billion Bailout Plan for Detroit

© REUTERS / Rebecca Cook Detroit bankruptcy mediator Judge Gerald Rosen (C) addresses the media about the ruling on the Detroit municipal bankruptcy during a news conference in the Theodore J. Levin U.S. Courthouse in Detroit, Michigan, November 7, 2014.
Detroit bankruptcy mediator Judge Gerald Rosen (C) addresses the media about the ruling on the Detroit municipal bankruptcy during a news conference in the Theodore J. Levin U.S. Courthouse in Detroit, Michigan, November 7, 2014. - Sputnik International
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US Bankruptcy Court for the Eastern District of Michigan stated that a US judge has confirmed a city's bankruptcy rescue plan according to which $7 billion of Detroit's debt will be slashed and $1.7 billion will be invested in its public services.

WASHINGTON, November 8 (RIA Novosti) – A US judge has confirmed a plan to rescue Detroit out of bankruptcy, by cutting some of its debt and investing $1.7 billion in the city's public services, a statement from the US Bankruptcy Court for the Eastern District of Michigan says.

"Bankruptcy Judge Steven Rhodes announced his decision today confirming the Eighth Amended Plan of Adjustment filed by the City of Detroit," the statement, released Friday, says.

According to the city's plan, $7 billion of Detroit's debt will be slashed and $1.7 billion will be invested in its public services while pensions will be cut by 4.5 percent.

The city of Detroit filed for bankruptcy in July, 2013, having accumulated an estimated $18 billion of debt. Detroit, which became the largest city in US history to declare bankruptcy, was also suffering from increased unemployment and a decreasing population.

Residents of Detroit have been struggling to pay their water bills and have suffered from water shutoffs, which threaten "a wide range of human rights", according to the United Nations.

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