Reuters reported Detroit filed the largest municipal bankruptcy in U.S. history on Thursday, setting the stage for a costly court battle with creditors.

According to the Reuters report, the bankruptcy, if approved by a federal judge, would force Detroit's thousands of creditors into negotiations with the city's Emergency Manager Kevyn Orr to resolve an estimated $18.5 billion in debt that has crippled Michigan's largest city. Michigan Governor Rick Snyder said he saw no other options for Detroit and approved Orr's request to file for Chapter 9 bankruptcy protection.

Detroit's creditors are expected to face huge losses, and the future of retiree pension and health benefits for thousands of city workers hangs in the balance, according to Reuters. Anticipating the filing on Thursday, investors drove prices of Detroit bonds and notes lower, sending their yields to record highs on Thursday.

View the entire Reuters story here.

To read the full Bankruptcy filing, click here.