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Policy: Budgets & Deficits

Detroit raced toward this week's bankruptcy trial

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Photo - In this July 16, 2013 aerial file photo, the downtown of the city of Detroit is shown. Detroit Emergency Manager Kevyn Orr raised more than a few eyebrows a year ago when he took the city into bankruptcy and predicted it would be out by the time his term expired in fall 2014. Because it is by far the largest city to file for municipal bankruptcy and the issues were so complex many experts predicted it would take years to resolve. But the city will take a major step toward that goal with a trial in federal bankruptcy court that starts Tuesday, Sept 2, 2014. (AP Photo/Paul Sancya, File)
In this July 16, 2013 aerial file photo, the downtown of the city of Detroit is shown. Detroit Emergency Manager Kevyn Orr raised more than a few eyebrows a year ago when he took the city into bankruptcy and predicted it would be out by the time his term expired in fall 2014. Because it is by far the largest city to file for municipal bankruptcy and the issues were so complex many experts predicted it would take years to resolve. But the city will take a major step toward that goal with a trial in federal bankruptcy court that starts Tuesday, Sept 2, 2014. (AP Photo/Paul Sancya, File)
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DETROIT (AP) — The trial to determine whether bankrupt Detroit's restructuring plan will be approved is set to begin just over a year after the city sought court protection in July 2013.

The confirmation trial for the largest municipal bankruptcy in U.S. history starts Tuesday in federal court.

Bill Nowling, spokesman for Detroit's emergency manager, says the city hopes to cut $12 billion in unsecured debt to a "much more manageable" $5 billion.

Massive debt, thousands of creditors and complex union and pension issues had many experts thinking Detroit's bankruptcy would take years to resolve. Two California cities — Stockton and San Bernardino — that filed a year before Detroit have cases that continue to drag on.

Pensioners already have approved the settlement plan, but at least one creditor says it is discriminatory.

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