DETROIT, April 3 Detroit's emergency manager,
Kevin Orr, on Thursday said in testimony before a U.S.
bankruptcy court that he wants the city to exit bankruptcy by
Oct. 15, just weeks after his 18-month term as state-appointed
emergency manager is scheduled to end.
The city's Chapter 9 bankruptcy case, the biggest in U.S.
history, was filed in July 2013 amid high hopes expressed by the
Kevin Orr that the bankruptcy would speed along. Instead, the
case has largely limped along as scores of city creditors
objected to pension cuts and other critical proposals.
At Thursday's hearing, attorneys for a bond insurer,
bondholders and the city's retired workers grilled Orr about a
$85 million proposed payment to UBS AG <UBSN.VX >and Merrill
Lynch Capital Services to terminate soured swaps that
were used to hedge interest rate risk on Detroit's pension debt.
Objections to the deal included concerns the two investment
banks would fare better than Detroit's other creditors and that
the city should instead pursue litigation against the banks.
Orr testified that resolving the swaps was in the best
interest of the city as opposed to the cost of challenging the
swap agreements in court.
"It was significant. It could be millions of dollars a
month," Orr said.
Objecting creditors are also worried that the banks'
intention to support Orr's proposed debt adjustment plan could
be used to force the plan on them.
Judge Steven Rhodes, who is overseeing the bankruptcy,
rejected, as too costly, two previous proposed swap settlements
that carried bigger price tags.
Late on Wednesday, Rhodes issued his third revision of a
schedule to confirm Detroit's plan to deal with its $18 billion
of debt and other obligations. The revision extends some key
filing dates ahead of a trial on the plan that would start on
(Reporting By Cherie Curry in Detroit; additional reporting by
Karen Pierog in Chicago; Editing by Steve Orlofsky)