WASHINGTON, December 4 (RAPSI) – The authorities of US city of Detroit, Michigan, which was deemed eligible Tuesday by a US federal court for Chapter 9 bankruptcy protection, are expecting to save millions of dollars by municipal property optimization and privatization of some enterprises, Bill Nowling, a spokesman of Detroit's bankruptcy manager Kevyn Orr, told RIA Novosti.

According to the local media outlet Detroit Free Press report, Detroit was deemed to have satisfied the requisite legal elements, thus making it the largest municipality in US history to attain Chapter 9 bankruptcy protection.

Detroit filed for Chapter 9 bankruptcy on July 18. An information sheet published on the court's website describes the purpose of Chapter 9 bankruptcy as enabling insolvent municipalities to gain protection from creditors while reorganizing debts through a “plan of debt adjustment.”

According to Detroit Free Press, lawyers representing the city are expected to file a plan of adjustment before the end of the year.

A memorandum submitted by law firm Jones Day in July states: “The City's enormous debts and other legacy liabilities present a substantial barrier to addressing [its] problems. The City owes various constituencies more than $18 billion: approximately (a) $5.85 billion in special revenue obligations; (b) $6.4 billion in other post-employment benefit… liabilities; (c) $3.5 billion in underfunded pension liabilities based on current actuarial estimates; (d) $1.13 billion in secured and unsecured general obligation… liabilities; (e) $1.43 billion in liabilities under pension-related certificates of participation ("COPs"); (f) $296.5 million in swap liabilities related to the COPs; and (g) $300 million in other liabilities. Debt service on the obligations other than those secured by special revenues consumed a staggering 42.5% of the City's revenues in the 2013 fiscal year. That percentage is projected to increase to almost 65% of revenues by 2017.”

According to Nowling, Detroit “announced its plans about privatization of garbage collection enterprise that allow to save $6 million, improve quality of service and develop recycling”. Also “Detroit handed electric sector and supply of consumers to the company DTE Energy and started the program of city illumination improvement”, he said.