The Norman Transcript

Nation/World

July 19, 2013

Detroit declares bankruptcy

(Continued)

DETROIT —

“The citizens of Detroit need and deserve a clear road out of the cycle of ever-decreasing services,” Snyder wrote. “The city’s creditors, as well as its many dedicated public servants, deserve to know what promises the city can and will keep. The only way to do those things is to radically restructure the city and allow it to reinvent itself without the burden of impossible obligations.”

A turnaround specialist, Orr represented automaker Chrysler LLC during its successful restructuring. He issued a warning early on in his 18-month tenure in Detroit that bankruptcy was a road he preferred to avoid.

He laid out his plans in June meetings with debt holders, in which his team warned there was a 50-50 chance of a bankruptcy filing. Some creditors were asked to take about 10 cents on the dollar of what the city owed them. Underfunded pension claims would have received less than the 10 cents on the dollar under that plan.

Orr’s team of financial experts said that proposal was Detroit’s one shot to permanently fix its fiscal problems. The team said Detroit was defaulting on about $2.5 billion in unsecured debt to “conserve cash” for police, fire and other services.

“Despite Mr. Orr’s best efforts, he has been unable to reach a restructuring plan with the city’s creditors,” the governor wrote. “I therefore agree that the only feasible path to a stable and solid Detroit is to file for bankruptcy protection.”

Detroit’s budget deficit is believed to be more than $380 million. Orr has said long-term debt was more than $14 billion and could be between $17 billion and $20 billion.

Orr’s decision to file now may have been influenced by lawsuits filed by some city workers and retirement systems to prevent Snyder from approving a bankruptcy request from the emergency manager, said Detroit-area turnaround specialist James McTevia.

Text Only | Photo Reprints
Nation/World
  • Rebels release train with bodies from jet

    HRABOVE, Ukraine — Bowing to international pressure, pro-Moscow separatists released a train packed with bodies and handed over the black boxes from the downed Malaysia Airlines plane, four days after it plunged into rebel-held eastern ...

    July 22, 2014

  • Gaza death toll passes 560

    GAZA CITY, Gaza Strip — A high-level attempt by the U.N. chief and the U.S. secretary of state to end deadly Israel-Hamas fighting was off to a rough start Monday: Gaza’s Hamas rulers signaled they won’t agree to an unconditional ...

    July 22, 2014

  • Perry sending Guard troops to border

    AUSTIN, Texas — Gov. Rick Perry is deploying up to 1,000 National Guard troops to the Texas-Mexico border over the next month to combat what he said Monday were criminals exploiting a surge of children pouring into the U.S. illegally. ...

    July 22, 2014

  • Better weather to aid in fire fight

    SPOKANE, Wash. — Calmer winds and cooler temperatures were allowing firefighters to go on the offensive Monday against a destructive wildfire that has charred hundreds of square miles of terrain in Washington State and is the largest in ...

    July 22, 2014

  • Gay, transgender workers gain U.S. bias protection

    WASHINGTON — President Barack Obama on Monday ordered employment protection for gay and transgender employees who work for the federal government or for companies holding federal contracts, telling advocates he embraced the “irrefutable ...

    July 22, 2014

  • Senate race zeroes in on metro Atlanta, north Ga.

    FLOWERY BRANCH, Ga. — Neither Republican running in Georgia’s closely watched Senate race has a natural advantage in metro Atlanta, where the state’s most populous area and a ring of northern exurbs are serving as the key battleground ...

    July 21, 2014

  • How a flood of kids upset immigration debate

    WASHINGTON — The nation’s yearlong deliberation over immigration has taken a head-snapping detour....

    July 21, 2014

  • Kerry makes bid for cease-fire

    WASHINGTON — Secretary of State John Kerry is heading back to the Middle East as the Obama administration attempts to bolster regional efforts to reach a ceasefire and sharpens its criticism of Hamas in its conflict with Israel....

    July 21, 2014

  • U.S. outlines case against Russia on downed plane

    WASHINGTON — Video of a rocket launcher, one surface-to-air missile missing, leaving the likely launch site. Imagery showing the firing. Calls claiming credit for the strike. Recordings said to reveal a cover-up at the crash site....

    July 21, 2014

  • Top school may benefit health

    CHICAGO — Disadvantaged teens may get more than an academic boost by attending top-notch high schools — their health may also benefit, a study suggests. Risky health behavior including binge-drinking, unsafe sex and use of hard drugs was ...

    July 21, 2014