Detroit's creditors got their first look Wednesday at the city's proposed plan to adjust its debt and emerge from bankruptcy, though no details were immediately available.
The city's Emergency Manager Kevyn Orr presented a proposed debt adjustment plan to creditors participating in court-ordered mediation. The proposal provides "fair and equitable treatment" for all parties, Orr said in a statement.
The plan, which the city said reflects discussions held to date with creditors, was distributed to creditors on a confidential basis. The city said changes could still be made before the plan is scheduled to be unveiled in court no later than March 1, an occasion that will mark a major milestone in Detroit's bankruptcy case.
"There is much work still to do and we believe the proposed plan provides the roadmap for all parties to resolve all outstanding issues and facilitate the city's efforts to achieve long-term financial health," Orr said in the statement.
Detroit, which faces the March 1 deadline to submit a plan for emerging from municipal bankruptcy, said it expects to file one with the U.S. Bankruptcy Court in about two weeks.
With the city sinking under a debt load topping $18 billion, Detroit filed the biggest municipal bankruptcy in U.S. history in July. Pension funds, retirees, and bond holders are among Detroit's major creditors.
Prior to the filing, Orr, a former corporate bankruptcy attorney, put out a proposal to creditors that called for paying just pennies on the dollar for some $11.5 billion of debt considered unsecured. That debt included a $3.5 billion unfunded liability for the city's two pension systems, as well as $1.45 billion of pension debt and certain general obligation bonds sold by Detroit.
U.S. Judge Steven Rhodes in December ruled that Detroit is bankrupt and that the city could cut pension benefits as part of its restructuring.