Detroit's emergency manager voiced confidence yesterday that the city could emerge from bankruptcy before his term expires in October 2014 and possibly without having to borrow more money, Reuters reported yesterday. Even so, Kevyn Orr, the bankruptcy expert who was appointed in March to a post that gives him almost unlimited power over Detroit’s finances, warned that the path back to financial health will not be painless for Detroit’s creditors. If the city wins court approval to proceed with the chapter 9 bankruptcy filing it made last month, virtually all of the city’s creditors will have payments on their bonds reduced, he said. Orr said that he anticipates “a lot of jousting” between creditors in federal bankruptcy court but warned that he expects virtually all the city’s creditors, even investors in the city’s general obligation bonds, will have to accept reduced payments as part of the bankruptcy process.
