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Politics & Government
Mon March 3, 2014
Detroit's "plan of adjustment" on fast track as creditors line up to object
People who oppose Detroit’s plan to reorganize in bankruptcy have until the start of next month to file objections.
One group of about 20 residents, retirees and activists picked up the paperwork to do just that at federal offices in downtown Detroit Monday.
Reverend Charles Williams II and representatives from the National Action Network led the group of people looking to file individual objections to the city’s plan of adjustment.
Williams says even though emergency manager Kevyn Orr's plan proposes even steeper cuts for most city bondholders, retirees are still being asked to shoulder too much of the burden. “You’re talking about a 26-36% [cut] in regards to [most] pensioners--and that’s not including calculations of how much [more] they’ll be paying in health care,” Williams says. “That’s a big hit, and we think that’s unfair.”
Williams says he hopes all the objectors will have their day in court in front of Judge Steven Rhodes.
But nearly every group of creditors in Detroit’s case is filing objections to the plan of adjustment, too—and Judge Rhodes is trying to fast-track the whole process.
Rhodes has set an April 1 deadline for filing objections, and a mid-June a trial to decide whether the plan can be implemented—a huge hurdle to clear in the country’s largest-ever municipal bankruptcy.
Many creditors have suggested Rhodes’ timeline is too aggressive, given the complexity of the case. They say the timeline simply doesn’t allow enough time for creditors to digest and respond to the plan, which still contains “a few blanks”—such as specific plans for pensions, city assets, and paying off two banks to end a disastrous interest rate swap on city pension debt.