Detroit City Council Negotiating to Keep Orr During Bankruptcy

A deal is in the works to keep Detroit Emergency Manager Kevyn Orr aboard for the city’s bankruptcy case, even though city officials could remove him as soon as next week, according to a councilman.

Terms to return control of the city to elected officials may be announced this week after negotiations among Orr, Mayor Mike Duggan and Michigan Governor Rick Snyder, Councilman George Cushingberry Jr. said in a telephone interview. Michigan law allows the council to remove Orr as emergency manager after he’s served 18 months. That date arrives Sept. 27.

“It looks like we have a settlement with him, and we’ll probably keep him on until we finish the bankruptcy,” Cushingberry said. “Then ask him to return the powers to us that he hasn’t already.”

Orr was named emergency manager in March 2013 by Snyder, a Republican. Under state law, that gave him power to bypass elected officials and restructure the government. Orr and Snyder filed the city’s record $18 billion bankruptcy case four months later.

In court mediation, Orr secured agreements from employees, pensioners and most creditors. With his term running out, he has returned many operational duties to Duggan. Cushingberry said keeping Orr on the job throughout the bankruptcy would ensure continuity and a smooth transition of power to the officials elected by residents.

Last Lap

Details of the deal are “fluid,” though an announcement may come this week, said Orr’s spokesman, Bill Nowling. He said it’s assumed the council would remove Orr as emergency manager.

“We’re still working out the transition details with the mayor,” Nowling said.

Cushingberry said it’s unclear whether the council first would remove Orr from office or merely convert his status with a new contract that would end his role as emergency manager after the bankruptcy. Cushingberry said he anticipated the case would end next month.

Snyder wouldn’t divulge details of any agreement.

“We’re focused on helping ensure the city can exit bankruptcy as smoothly and quickly as possible, as that’s in the best interests of both Detroiters and Michiganders,” Snyder’s spokeswoman, Sara Wurfel, said in an e-mail. “We are talking and working cooperatively with the city -- both mayor and council -- to see how that can be best achieved.”

If Orr’s bankruptcy plan is approved, it wouldn’t grant the mayor and council unfettered control. It includes a provision to create an oversight panel modeled after the control board that guided New York’s finances after that city’s near-bankruptcy in the 1970s.

Cushingberry said he doesn’t want to summarily fire Orr.

“I really like Kevyn Orr personally,” he said. “He has done a tremendous job as our lawyer in bankruptcy.”

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