Detroit’s Creditors Are Asked to Accept Pennies on the Dollar
By STEVEN YACCINO, NYT
DETROIT — The emergency manager who was sent to reverse the fortunes of this financially troubled city asked some of its creditors on Friday to accept pennies on the dollar as he laid out his plan for tackling Detroit’s staggering debt, kick-starting negotiations that could determine whether the city is headed to bankruptcy court.
Presenting a grim take on the city’s fiscal standing in a closed-door meeting, the emergency manager, Kevyn Orr, a bankruptcy lawyer from Washington who was appointed in March, made a case to dozens of bondholders and union leaders that deep cuts alone cannot save Detroit. He said that painful sacrifices must be shared.
“This is not meant to be a hostile act,” Mr. Orr said at a news conference in which he discussed the session. “It isn’t meant to be combative. It is meant to be an acknowledgment and recognition of the realities that we can no longer deal with.”
The proposal includes an offer that amounts to less than 10 cents on the dollar on some of the city’s unfinanced debt obligations like unsecured bonds and a portion of unfunded pension liabilities, which together total more than $11 billion. He will hold another meeting next week with labor leaders and retirees for further discussions on the plan, which also includes a proposal to reduce health care benefits for retired city workers.
(More here.)
DETROIT — The emergency manager who was sent to reverse the fortunes of this financially troubled city asked some of its creditors on Friday to accept pennies on the dollar as he laid out his plan for tackling Detroit’s staggering debt, kick-starting negotiations that could determine whether the city is headed to bankruptcy court.
Presenting a grim take on the city’s fiscal standing in a closed-door meeting, the emergency manager, Kevyn Orr, a bankruptcy lawyer from Washington who was appointed in March, made a case to dozens of bondholders and union leaders that deep cuts alone cannot save Detroit. He said that painful sacrifices must be shared.
“This is not meant to be a hostile act,” Mr. Orr said at a news conference in which he discussed the session. “It isn’t meant to be combative. It is meant to be an acknowledgment and recognition of the realities that we can no longer deal with.”
The proposal includes an offer that amounts to less than 10 cents on the dollar on some of the city’s unfinanced debt obligations like unsecured bonds and a portion of unfunded pension liabilities, which together total more than $11 billion. He will hold another meeting next week with labor leaders and retirees for further discussions on the plan, which also includes a proposal to reduce health care benefits for retired city workers.
(More here.)
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2 Comments:
Detroit is but one example of what happens when left of the aisle politicians and unions are allowed to implement their policies virtually unchecked.
i thought debt wasn't the problem.
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