Detroit, banks reach new deal on pension debt
The city of Detroit has reached another tentative agreement to pay off two banks for a complicated pension debt deal that's costing the city millions of dollars each month.
Emergency manager Kevyn Orr proposed to borrow $350 million, and use most of it to pay off the banks and end the deal, at about 75 cents on the dollar.
But bankruptcy judge Steven Rhodes questioned whether that agreement was too generous. He ordered the two sides to go back to the bargaining table.
After days of “intense negotiations,” the parties reached a Christmas Eve deal that would pay the banks more like 55 to 60 cents on the dollar, saving Detroit about $65 million.
But Judge Rhodes must still approve those terms.