Unfortunate and Unpleasant Fact Based Decision

by Hal Mooz 21. February 2014 12:52

Detroit Files Historic Bankruptcy Blueprint

Detroit revealed its historic plan to emerge from under $18 billion in debt Friday, laying the groundwork for what’s expected to be a long, bitter battle with creditors, retirees and bondholders over the biggest municipal bankruptcy ever.

The 120-page 'plan of adjustment' could change radically as negotiations with more than 100,000 creditors move forward. It must still be approved by U.S. Bankruptcy Judge Steven Rhodes.

A summary of the plan said it would devote $1.5 billion over 10 years to capital improvements, with up to a third of that aimed at blight removal. It also said it proposes paying general obligation creditors about 20 percent of what they are owed through the issuance of new bonds. If police and fire department retirees agree to the plan, they would receive about 90 percent of their pensions, after cutting cost of living allowances. General retirees would get about 70 percent.

The draft also detailed plans to help pensioners keep more of what they are owed by using state and private funds to protect against the sale of city-owned art at the Detroit Institute of Arts, The AP said.

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