A restructuring expert testified in bankruptcy court yesterday that Detroit's relatively fast move through municipal bankruptcy has resulted in costly creditor settlements and too little emphasis on fixing the city's broken operations, Reuters reported yesterday. Still, Martha Kopacz, who was appointed by Judge Steven Rhodes to assess the viability of Detroit's plan to restructure $18 billion of debt and obligations, concluded that the plan is feasible and that its underlying revenue and other assumptions are reasonable. "It's likely that the city of Detroit after confirmation of the plan of adjustment is able to sustainably provide basic services to the city without a significant probability of default," she testified. She gave the plan a passing grade, saying problems could emerge from the city council's budget, low training of staff, pension funding and other issues. Kopacz, a senior managing director at Phoenix Management in Boston, also said that the money the city will borrow to help it exit the largest-ever municipal bankruptcy and begin rebuilding "will enable the city to resolve its bad borrowing procedures and bad financial decisions of the past."
