It appears that the Detroit Public Schools (DPS) may be the first metropolitan school district to file for bankruptcy. Jim McTevia of McTevia & Associates of Bingham Farms said, “They’re going to have to reduce their debts, and the only vehicle is through the court system.” Bankruptcy court may be the only way the district has to avoid paying millions to vendors, employees and bondholders. They are considering filing under Chapter 9, which is a unique form of municipal bankruptcy. Under Chapter 9, DPS might be able to renegotiate vendor and labor agreements. Robert Bobb, a financial manager for DPS, met on Thursday with retired U.S. Bankruptcy Judge Ray Reynolds Graves to explore the option. If DPS does file for bankruptcy they would be the first large city school in the nation to do so.

To learn more refer to the article in the Detroit News.