Detroit to offer creditors less than 10 percent of what city owes -report
DETROIT, June 7
DETROIT, June 7 (Reuters) - Detroit Emergency Manager Kevyn Orr plans to deliver grim news to the city's creditors next week: Take less than 10 percent of what the city owes or risk losing it all in a bankruptcy proceeding, the Detroit Free Press reported on Friday.
The offer by Orr, appointed by the state to shrink Detroit's long-term debt, will be made in a meeting with 150 representatives of the city's bondholders and bond insurers, pensioners, unions and others, the newspaper said. Orr is expected to deliver a 200-page document that outlines the city's assets and liabilities, it said.
Bill Nowling, Orr's spokesman, declined to confirm details of the report but told Reuters the meeting will occur next week. However, he told the Free Press:"It will be staggering, what we ask of our creditors and our stakeholders."
The meeting is expected ahead of a June 15 deadline by which Moody's Investors Service has said Detroit is supposed to make a $39.7 million debt payment. Orr, when he released his first official report on Detroit's finances last month, said the city will have enough cash on hand to meet its existing obligations through at least the fourth quarter.
In his report, Orr stated that the city has run annual deficits of $100 million and more since 2008. Detroit is believed to owe about $17 billion in debts and liabilities.
Orr has insisted that a negotiated settlement with creditors and other stakeholders will be preferable to a bankruptcy filing for all parties.
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