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The nation’s largest municipal bankruptcy ended yesterday, officials said, marking a turning point for a former industrial powerhouse that has struggled for decades with population loss, blighted property, high crime and poor city services, the Wall Street Journal reported today. After almost 21 months in office, Detroit Emergency Manager Kevyn Orr, who steered Detroit into a chapter 9 filing in July 2013, resigned on Tuesday saying that his job to restructure debt and help the city balance its books for the future had been accomplished. “It’s important for me to step back and return the city to the regular order,” Orr said yesterday. He said he would file legal paperwork by day’s end to usher the city out of bankruptcy court, save a few loose ends including mediation over professional fees from lawyers and consultants charged to the city. His legal team filed the order just before 3 p.m. The judge in the case is scheduled to hold a status hearing in the case on Monday to address any lingering legal issues.

Michigan Governor Rick Snyder's office said that Detroit’s municipal bankruptcy case will end today when the city's debt adjustment plan will take effect, Reuters reported yesterday. The city, which filed for bankruptcy in July 2013, won approval on Nov. 7 from a federal court judge for its plan to shed about $7 billion of its $18 billion in debt and obligations. In a letter, Snyder accepted Detroit Emergency Manager Kevyn Orr’s declaration that the city's financial emergency is over and that it was time for his job to end. Snyder appointed Orr, a former corporate bankruptcy attorney at law firm Jones Day, to run Detroit in March 2013. Orr's departure will restore complete control over the city to Mayor Mike Duggan and the city council, although a state-created oversight board is in place to review and approve financial matters. Detroit is expected to close deals to distribute bonds to settling creditors, including bond insurers, on the effective date. The city is also planning to borrow $275 million through Barclays Capital to retire $120 million of debt, pay settlements and fund restructuring initiatives.

East Cleveland will wait until after the first quarter of 2015 to decide whether to seek bankruptcy protection, the city's finance director said yesterday, noting such a filing is only one of several options under consideration, Reuters reported yesterday. The assessment was less dire than comments last month by Ohio's state auditor, Dave Yost, who said that the small suburb of its much bigger neighbor Cleveland was on the "verge of collapse." East Cleveland has been struggling financially for years. Mobile phones belonging to city workers have been disconnected. The fire department does not have a working ladder truck and there is no money to fix street sweeping machines. "During 2014, only sheer luck has kept it from that one unexpected expense that would jeopardize the payroll," wrote Dave Yost in a letter dated Nov. 21. "That luck is unlikely to continue, given the growing number of problems and expenses that have been deferred for lack of money."

Outgoing Detroit emergency manager Kevyn Orr told a state oversight board on Friday that he's prepared to ask a federal judge to make the city's exit from bankruptcy official next week, and that he'll resign, leaving the city with a one-time, $100 million surplus, The Detroit Free Press reported on Friday. Orr, speaking to the Financial Review Commission, which has had oversight of the city’s finances for at least 13 years, said that he intends to sign his final order as EM next week, "recommending to you and the governor that the financial emergency is completed, and I would resign." If accepted by Gov. Rick Snyder, that would fully restore government powers to Detroit's elected officials, except that the city will remain under the oversight of the review commission and must stay within the confines of its bankruptcy exit plan, which lays out goals for fiscal stability and reinvestment in critical city services over the next 10 years. Orr would present the order to Hon. Steven Rhodes, but Orr said that it is highly unlikely that the judge will reject the exit plan since he approved Detroit's bankruptcy adjustment plan last month. The date Orr selects will mark Detroit's official exit from the largest municipal bankruptcy in U.S. history, with the city shedding $7 billion of its $18 billion in debts and liabilities and instituting a plan to spend $1.4 billion on blight removal and improving city services over the next decade.

Detroit might not be ready to exit the biggest municipal bankruptcy in U.S. history until Dec. 15, Reuters reported on Friday. An attorney for the city said last month Detroit could potentially exit bankruptcy around Dec. 8-10 as it has incorporated its debt-adjustment plan into its budget. The plan was approved by a bankruptcy court judge on Nov. 7. Kevyn Orr, the city's state-appointed emergency manager, said that Detroit's two-year budget will eliminate a carryover deficit of about $58 million and incorporate a reserve fund totaling $62 million, or 5 percent of appropriations required under state law. The budget will also provide $49 million that could be tapped to fund restructuring initiatives in fiscal 2016.

San Bernardino, Calif., has run up legal costs of more than $6 million since it declared bankruptcy in 2012, according to a senior city official, Reuters reported yesterday. San Bernardino, a city of 205,000 65 miles east of Los Angeles, declared bankruptcy in August 2012 with a $45 million budget deficit. Gary Saenz, the city’s attorney, told Reuters that so far the city has paid $6.16 million to its bankruptcy lawyers, the Santa Monica firm of Stradling, Yocca, Carlson & Rauth. The case has many more months to run, and experts believe the final legal fees could easily exceed $10 million. Last month, the judge overseeing the case set a May deadline for the city to produce a bankruptcy plan.

In a sign of Detroit’s continuing challenges, the city’s schools, police stations, fire houses and other public buildings lost power yesterday after an aging underground cable failed, the Wall Street Journal reported today. Within 90 minutes, the Detroit Public Lighting Department with help from DTE Energy Co. began restoring service, and all affected buildings had access to power by yesterday evening, the city said. It also served as a reminder of the city’s problems, even as it nears an exit from chapter 9 protection. “The bankruptcy order doesn’t solve the decades of neglect in our infrastructure, and that is what we saw today,” said Mayor Mike Duggan.

The SEC has increased its focus on the municipal market since the credit crisis and 18-month recession that ended in June 2009, Bloomberg News reported yesterday. Those events helped push Jefferson County, Alabama, Detroit and three California cities into bankruptcy and left government pension plans reeling from investment losses. The agency has settled with the governments of New Jersey, Illinois and Harrisburg, Pa., for misleading investors about their financial state. Last year, in a case against an agency in Washington state, the SEC levied its first fine against a municipal issuer that misled investors. The leniency program introduced in March is aimed at municipalities that fail to file timely reports on rating changes and other information of interest to investors, while claiming in bond documents that they do. It’s also open to the bankers who underwrote the debt. The SEC said that borrowers could settle without fines if they turn themselves in. Banks’ penalties are capped at $500,000.

The attorneys and financial consultants who represented Detroit's two pension funds during the city's bankruptcy will have their fees subjected to the same scrutiny as other highly paid professionals, the Detroit News reported on Friday. Bankruptcy Judge Steven Rhodes ruled on Wednesday that the Police and Fire Retirement System and General Retirement System should be subjected to the court's review of costs associated with litigating the largest bankruptcy in U.S. history. Robert Gordon, an attorney for the pension funds, argued in court on Monday that they should not be subject to fee examiner Robert Fishman’s ongoing reviews because Detroit taxpayers are not directly footing their legal bills. Judge Rhodes disagreed, while acknowledging there's no legal precedent for having a creditor's legal fees subject to court review in a chapter 9 municipal bankruptcy.

City leaders in Stockton, Calif., are urging a federal judge to let the city exit bankruptcy with a court-approved reorganization plan, despite an appeal of that proposal filed by mutual-fund giant Franklin Templeton Investments, the Wall Street Journal reported on Saturday. In court papers, Stockton officials said that the appeal from Franklin Templeton, which is arguing that the 300,000-resident city can afford to repay more money on the municipal bonds it issued, could take years to litigate. During the appellate process, Franklin Templeton’s lawyers asked that Stockton remain in bankruptcy, which city leaders argued would unfairly delay payments to retired municipal workers who have agreed to give up their health care benefits and accept a one-time payment instead.