Tagged: municipal bankruptcy

Detroit’s emergency manager Kevyn Orr sits down with the city’s major creditors Friday.

The meeting sets up negotiations that could help Detroit avoid filing for bankruptcy—or lay the groundwork for it.

Orr will gather all the city’s big creditors—unions, retirees, and banks—to pitch his plan.

They’ll all be asked to take some major losses to help Detroit shed some of its crippling debt load, estimated at a least $15 billion.

Detroit emergency manager Kevyn Orr didn’t share much new information at his first public meeting Monday night—but he did set the stage for an upcoming meeting with the city’s creditors.

At his first public meeting—required by the emergency manager law that empowers him--Orr told a story we already know: Detroit hasn’t been paying contractors, making pension payments, and has only survived by borrowing billions.

Ever since Detroit emergency manager Kevyn Orr mentioned maaaaybe putting DIA gems on the table to appease creditors, the you-know-what has hit the fan.

Selling art to pay off debt is a big museum no-no, especially for one as well-regarded as the Detroit Institute of Arts.

Why, museum supporters ask, would any rich donor ever want to give money or art to the DIA again?

What’s to guarantee their gifts won’t just be auctioned off the next time the city needs cash?

And further, if the DIA is blacklisted and other cultural icons sold off, how is a post-bankruptcy Detroit supposed to become a sustainable, cultural, people-drawing city?

It appears that officials might be laying the groundwork for a so-called “managed bankruptcy” in Detroit—though it’s something they hope won’t actually happen.

A process for going through Chapter 9 municipal bankruptcy is laid out in the state’s new emergency manager law that kicks in next month. And it could happen even if Governor Snyder appoints an emergency manager for Detroit.

Both state and city officials used to say that bankruptcy was completely off the table for Detroit.