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Detroit to emerge from 'historic' bankruptcy Wednesday (+video)

Detroit's historic Chapter 9 bankruptcy will be officially over by midnight on Wednesday, marking an end to the tenure of emergency manager Kevyn Orr. 

Detroit's historic Chapter 9 bankruptcy ended Wednesday, marking an end to Kevyn Orr's tenure as emergency manager as the city enters a "new chapter," as Michigan Gov. Rick Snyder (R) put it. 

"It's truly historic," Governor Snyder said. "It really happened because of great partnerships, of people working together."

The city will shed $7 billion in debt while reinvesting $1.7 billion over the next 10 years to improve city services, the Detroit Free Press reports. The final paperwork required to let the city to officially emerge from bankruptcy should be completed by midnight Wednesday, Mr. Orr said, at which point his resignation takes effect.

Recommended: Detroit's bankruptcy woes: five key things to know

"I feel very fortunate to have had the opportunity and very fortunate for the outcome," Orr told the media. "The reality is the city is moving forward and that gives me a great deal of pride and satisfaction."

Appointed by Snyder in March 2013, Orr led Detroit to file for bankruptcy in July 2013 – the largest US city to ever do so. At that time, the city had roughly $18 billion in debt and was struggling with annual budget deficits, faulty city services, and urban blight that led many to view the home of Motown and General Motors as a symbol of decay. Just last month, a federal judge approved a plan to end the bankruptcy.

"If the city takes advantage of this unique opportunity to shed the problems of the past and stays on the path that has been blazed in restructuring, Detroit is poised to grow and thrive for the benefit of its residents and this state for many years to come," Orr wrote in a letter to Snyder.

In the letter, Orr praised the milestones achieved during the bankruptcy proceedings, including the "grand bargain," a deal struck to reduce cuts to pensions and preserve the Detroit Institute of the Arts. The bargain was funded by pledges from state and local foundations, DIA donors, and the state of Michigan.

Yet while the famed art museum was preserved, and will be spun off as an independent institution, other city assets – such as the Joe Louis Arena, home to the Red Wings hockey team – were turned over to creditors

Mayor Mike Duggan and the City Council will now take control of the city back from Orr. Mayor Duggan echoed the sentiment that the city will need to stay on track in order to "earn" the money slated for reinvestment. 

"If the city hits all the budget targets and we successfully raise revenues in multiple areas and cut costs in multiple areas over 10 years, there will be $1.7 billion in new services," he said, adding that it's "money we're going to have to earn."

It will take at least a decade before the city is once again self-sufficient. A Financial Review Commission approved by the governor and state legislature will oversee the city's finances. And an investment committee will keep watch over decisions made by the two pension boards in the city. 

Nevertheless, "We're better off today than we were 18 months ago," City Council member Gabe Leland said.

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