(Updated June 21, 2013)
“Today’s a big day for Detroit creditors as they’re scheduled to meet with and presumably get the bad news from Emergency Manager Kevyn Orr,” said Triet Nguyen, in his Muni Bond Insights column, The Muni Market at a Crossroads, dated June 14, 2013.
The future of the Motor City will continue to unfold over the next 30 days, as it embarks upon a road trip like no other to avert municipal bankruptcy …
Indeed it was a big day for Detroit – and holders of Detroit municipal bonds. In a Proposal to Creditors, Orr unveiled plans to spin off the City’s Water and Sewerage Department to an independent authority; cut benefits to City retirees and current employees; place a moratorium on debt service payments on liabilities not secured by a dedicated revenue stream; and invest $1.25 billion in City government and services.
The future of the Motor City will continue to unfold over the next 30 days, as it embarks upon a road trip like no other to avert municipal bankruptcy, as set forth in Orr’s plan. This is a story to watch. To date, Stockton, California has been the largest U.S. city to file for Chapter 9 municipal bankruptcy protection.
A Detroit Free Press article sums it up best: “The impact of the [Proposal for Creditors] Orr released publicly and to creditors in a historic meeting this morning cannot be understated.”
Following is a compilation of resources we’ve compiled pertaining to the recent developments in Detroit’s financial proceedings.
- City of Detroit Proposal for Creditors (dated 6/14/13):
- City of Detroit Proposal for Creditors – Executive Summary (dated 6/14/13):
- City of Detroit Financial and Operating Plan (dated 6/10/13):
- City of Detroit 2012 Comprehensive Annual Financial Report
- State of Michigan: Detroit Can’t Wait
A Sampling of Local and National Media Coverage:
- (6/21/13) The Detroit News – Detroit’s Bankruptcy Threat Turbo-Charging Progress
- (6/21/12) The Detroit Free Press – How a Chapter 9 Bankruptcy Could Affect Detroit Pensions, Health Care
- (6/21/13) Reuters, MuniLand blog – When Detroit Goes to Bankruptcy Court
- (6/18/13) The Detroit News – Orr to Order Probe of City’s Pension Funds
- (6/17/13) Reuters – Update 3: Detroit Default, Restructuring Plan Break New Ground, Moody’s
- (6/17/13) The Bond Buyer (free article) – Detroit Default Shines a Light on Bond Insurers
- (6/15/13) Crain’s Detroit – Orr’s Detroit Restructuring Plan: An Overview of Proposed Moves
- (6/14/13) CBS Detroit – “We’re Tapped Out”: Detroit Emergency Manager Proposes Plan to Creditors”
- (6/14/13) Reuters – Detroit Defaults on Some Debt to Avoid Bankruptcy Filing
- (6/14/13) Bloomberg – Detroit Peddles its Municipal Assets to Avoid Record Bankruptcy
- (6/14/13) Detroit Free Press – Orr: Detroit to Halt Debt Payments, Reinvest $1.25 Billion in City
- (6/14/13) Detroit Free Press – Detroit Wades into Uncharted Territory with Possibility of Bankruptcy