Detroit ‘Pleased’ With Creditor Vote on Its Debt-Cut PlanSteven Church
Detroit is “pleased with the vote” of creditors on the plan it proposed to eliminate $7.4 billion in debt and will release the final results this evening, a spokesman for the city’s emergency manager said.
The final tally was delayed to incorporate a ruling by U.S. Bankruptcy Judge Steven Rhodes, Bill Nowling, spokesman for emergency financial manager Kevyn Orr, said in an interview.
“People are not going to be surprised by what gets reported today,” Nowling said.
Since the city filed its record $18 billion municipal bankruptcy, Orr has been negotiating with stakeholders including public workers and pension systems to put the city of 700,000 back on its fiscal feet after years of decline.
The biggest unions, including the American Federation of State, County and Municipal Employees and the United Auto Workers, negotiated deals that reduced the size of proposed pension cuts. The unions, and groups representing retired city workers, urged their members to vote in favor of the plan.
Rhodes will start a trial next month to help him decide whether to approve the plan and take the vote of creditors into account. The trial is scheduled to last into mid-September.
An adviser appointed by the court to evaluate the plan has said it’s feasible.
The judge today ruled that a regional agency, the Macomb Interceptor Drain Drainage District, could have its votes counted as if the city owed it $26 million. The district had sued the city over cost overruns and corruption associated with a drainage project.
Although no court has ruled on the lawsuit, Rhodes said the district could vote as a creditor in the case. Macomb County, a suburb of Detroit that has influence over the district, opposes the city’s bankruptcy plan.
The case is In re City of Detroit, Michigan, 13-bk-53846, U.S. Bankruptcy Court, Eastern District of Michigan (Detroit).