Detroit’s attempt to avoid bankruptcy will hit a critical stage this week as emergency manager Kevyn Orr brings together dozens of creditors to present a stark offer: less than 10 cents on the dollar for the loans, bonds, retiree obligations and other debts that have been strangling the city for years, the Detroit Free Press reported on Saturday. Orr is expected to meet this week with as many as 150 representatives of the city’s major creditors, from big national banks that hold the city’s bonds and insurers who guarantee them, to unions and pensioners who rely on the city for retirement income and health care. If Orr can’t win a deal with creditors, the fate of benefits for 30,000 current and retired municipal workers and the city’s ability to fund its basic services would likely move into a federal court in proceedings some bankruptcy lawyers fear could stretch out for years. Orr said that he remains optimistic a consensual deal can be brokered outside court, and if not, that a chapter 9 bankruptcy could be done in relatively quick fashion.
