Detroit and Michigan Come to Terms on Bailout, Averting Bankruptcy

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After weeks of protest, Detroit's city council agrees to a deal that directs budgetary matters to an outside advisory board, but avoids the sweeping state takeover that many residents opposed.

Nearly bankrupt Detroit has taken the first step down what is likely to be a long road to solvency, agreeing to strict state oversight but averting a full-blown takeover of its finances. But Michigan has promised no bailout money, and Detroit will be subjected to more stringent review than is customary for floundering cities, as it grapples with how to meet $12 billion in pension and benefit obligations and how to close a $200 million budget deficit.

In a vote late Wednesday, …