Report: Detroit EM To Offer Creditors Pennies On The Dollar
DETROIT (WWJ) - Detroit’s emergency manager is hoping to avoid bankruptcy for the city by trying to settle debts with creditors for just pennies on the dollar.
As WWJ’s Vickie Thomas reports, it’s a stark reality for the city’s creditors as Emergency Manager Kevyn Orr is reportedly set to offer less than 10 cents on the dollar for loans, bonds, retiree obligations and other debt.
Next Friday, Orr plans to present a detailed restructuring plan to about 150 representatives of Detroit’s major creditors, including many city unions and the city’s two largest pension funds. The outcome of the meeting, set to take place at Detroit Metropolitan Airport, will likely determine if Orr will be forced to move toward declaring Chapter 9 bankruptcy in the city.
The meeting comes nearly a month after Orr indicated the city’s financial outlook is in worse shape than he thought, though he said he’s still optimistic a deal can be worked out to avoid bankruptcy.
“Frankly, from my perspective, if I can accomplish what I need to accomplish without bankruptcy, I’d be elated,” Orr said in May. “I can’t guarantee that [bankruptcy won’t happen] in the least, in fact, to a large degree that’s going to be dependent upon the positions of a lot of other stakeholders that they have in this, some of whom might prefer a court order to make them do the things they need to do.”
Councilwoman Brenda Jones said if the city does go into bankruptcy, she’s worried about the unions.
“As a former union president, I can say it’s certainly looking like it,” she said. “If it walks like a duck, quacks like a duck, than guess what? It must be a duck. So, you know, it certainly looks like union busting, even though they’re saying that it’s not,” she said.