Detroit Emergency Manager to file plan with bankruptcy court this week
This week the City of Detroit’s Emergency Manager is to file a disclosure statement with the federal court overseeing the city’s bankruptcy ahead of the March 1 deadline.
The plan of adjustment restructuring Detroit’s debt includes a ten year blueprint for the city as part of the 2012 consent agreement with the State of Michigan. The restructuring consultant Conway MacKenzie has been working on that ten year plan.
Bill Nowling is the spokesperson for Emergency Manager Kevyn Orr. He says that blueprint will be part of the filing this week.
“The ten year plan that they’re working on, the fruits of that labor will be in the plan that’s going to be given to the court. And that’s what’s going to be litigated and argued going forward,” Nowling said.
Nowling adds the budget will be smaller than the current $1.2 billion dollars the city now spends every year.
“We’re going to be a little bit less than that. Not a lot, but a little bit. But, that’s in recognition of the fact we don’t think revenues are going to come back as fast and we have to be prudent in our planning so that we can put down a baseline that we can meet.”
The budget also includes up to a 150 million dollars a year reinvestment in the city’s crumbling infrastructure. That will force the city to concentrate only on essential city services such as police, fire, park maintenance, and trash pick up.
According to a Wall Street Journal report published on February 8, the Emergency Manager is “proposing to favor pension funds over bondholders to resolve an estimated $18 billion in long-term obligations.” The Journal indicates it saw a draft of the plan which went to creditors for review and a “vote” on the plan. Negotiations were to be held prior to the filing of the plan of adjustment.
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