Detroit’s historic bankruptcy has evolved into a populist fight between retirees and banks, as the city prepares to unveil a critical plan next week to shed some of its $18 billion in debts, the Detroit News reported today. Gov. Rick Snyder and Detroit Emergency Manager Kevyn Orr recently have made moves that fueled the fight, as the governor signaled a desire to treat pensioners better than investors of city bond debt. He has pledged $350 million in state assistance for pensioners, while telling Wall Street it will not be getting special treatment. In recent weeks, Orr has taken a more aggressive stand against Wall Street financial institutions, including filing suit to invalidate a disastrous 2005 debt deal blamed for plunging Detroit into bankruptcy. Orr’s debt-cutting reorganization plan, which he said Monday is set to be made public next week, is expected to give retirees a larger percentage of the billions they’re owed over the amount bondholders are likely to recover from the $369 million they lent the city.
