Kevyn Orr, the emergency manager shepherding Detroit through its record municipal bankruptcy, told a judge about the tough situation Michigan’s biggest city faced when he was asked to help get its house back in order, Bloomberg News reported yesterday. Core services were “substandard” and finances were in “dire straits,” Orr, testified yesterday in Detroit federal court, where a bankruptcy judge is weighing whether the city’s plan to eliminate $7 billion in debt is feasible and fair. Orr was given sweeping authority over Detroit’s finances and government in 2013, when Governor Rick Snyder appointed him to help the city reduce $18 billion in debt. Previously, Orr was a partner at the Jones Day law firm, which is now helping Detroit through the debt-adjustment process. Union lawyers initially attacked Orr’s decision to put Detroit into chapter 9 bankruptcy in July 2013. They accused him and Jones Day of conspiring with Snyder to drive the city into a filing without considering alternatives. Since then, mediation has produced agreements with most major creditor groups. Orr said he was “amazed that we reached some of the settlements we did” and that most wouldn’t have happened without mediation, which was led by Gerald Rosen, the chief federal judge in Detroit.
