DETROIT (WWJ/AP) – A judge has set a June 16 trial on Detroit’s plan to emerge from bankruptcy.
U.S. Bankruptcy Judge Steven Rhodes set a series of deadlines Monday. He’s giving creditors until March 28 to file objections to the plan released last week by Detroit emergency manager Kevyn Orr.
Rhodes is encouraging all sides to negotiate with “full intensity and vigor” to resolve any disputes before they land in court.
Under Detroit’s plan, pension holders could expect to get 70 percent to 90 percent of what they are owed, while many banks would receive as little as 20 percent.
There still are unsettled issues, especially Gov. Rick Snyder’s proposal for the state to kick in $350 million toward pensions. Lawmakers haven’t signed on yet.
Orr’s 120 page plan, filed in federal bankruptcy court on Friday, makes cuts to pensioners and creditors while offering a blueprint for the city to emerge from the largest municipal bankruptcy in U.S. history.
Orr has said the city’s has at least $18 billion in debt. About $6 billion is Detroit Water and Sewerage Department debt, which is secured by water bill payments, while an additional $12 billion is unsecured, meaning it’s not covered by a revenue stream.
Orr’s figure also includes about $2 billion in general obligation bond debt, $5.7 billion in unfunded retire health care obligations and $3.5 billion in unfunded pension liabilities — although pension officials have disputed that figure.
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