04.22.14

In some ways, the bankruptcy is like a jigsaw puzzle, where a thousand little pieces have to fall into place before the big picture can take shape. ~ Stephen Henderson, The Detroit Free Press

One More Lap. U.S. Treasury Secretary Jacob Lew will travel to the Motor City Thursday and Friday this week. While he will not be bringing cash or a new urban policy, he will travel with some hope of wrapping up discussions with regard to redirecting federal foreclosure relief funds to be invested in blight removal—a critical step towards the long-term sustainability of Detroit. Continue reading

04.18.14

One More Lap. The Detroit Police and Fire Retirement Board yesterday voted unanimously to endorse Kevyn Orr’s revised plan of adjustment proposal to eliminate proposed reductions to post-retirement pension benefits, but modify future cost-of-living or COLA adjustments. The approval, coming one day after Detroit’s General Retirement System endorsed a similar proposed agreement which would sharply reduce the city’s proposed reductions to civilian retirees’ pension, remains to be final until individual active and retired Detroit workers vote on the plan in the coming months. Under the proposed agreement, retirement benefits would be reduced by 4.5 percent. Continue reading

04.17.14

One More Lap. Following perhaps the most extraordinary week of its bankruptcy, the Motor City this morning heads to federal bankruptcy court to request Judge Steven Rhodes’ certification of its electronically revised plan of adjustment and disclosure plans—both submitted last night in the wake of yesterday’s developments. Detroit will ask the federal court to find the documents to be sufficient and accurate, as well as understandable. Should the court approve, that would set the stage for a vote by the city’s 170,000+ creditors beginning on Mayday. Last night’s eleventh hour submittal came on the heels of the 7-0 vote yesterday by the board of the Detroit General Retirement System (GRS) to endorse a retirement pension agreement that would cut pension checks for non-uniformed city workers and retirees by 4.5% and eliminate cost-of-living adjustment increases to retirement benefits. Continue reading

04.16.14

One More Lap. Just hours after Chief U.S. Judge Gerald Rosen, the Motor City bankruptcy mediator selected by U.S. Bankruptcy Judge Steven Rhodes, announced that that the Detroit Police and Fire Fighters Association had agreed to support Emergency Manager’s revised plan of adjustment, negotiators for Detroit pension boards agreed late yesterday to retiree benefit cuts that were dramatically reduced from those initially proposed: “This settlement agreement was reached after intensive negotiating sessions over the past several months in which the parties’ interests were fully and vigorously represented by counsel and all issues robustly negotiated.” Continue reading

04.15.14

One More Lap. The Motor City missed its self-imposed midnight deadline last night to file its amended plan of adjustment, as the pace of agreements appeared to accelerate prior to Thursday’s appearance before U.S. Bankruptcy Judge Steven Rhodes. The Detroit News reports that the negotiators, by late last night, appeared to be close to an agreement with at least one of the Motor City’s pension funds—even as negotiations on deriving revenues from the lease of a regional water authority appeared moribund. George Orzech, Chairman of the Detroit Police and Fire Retirement System, told the newspaper he was hopeful there could be a breakthrough as early as today:  “We’re all expecting to come to some kind of understanding tomorrow, I hope…But who knows? I’ve been wrong before.” Mr. Orzech added: “Everybody’s going to be cutting deals now because you’re at the 12th hour…You want this to work. I don’t want to be doing this…again in a few years.” Continue reading

04.09.14

One More Lap. The Detroit Free Press earlier this morning reported that Detroit could today announce it has reached a bankruptcy settlement with its unsecured bondholders. If so, the announcement would reflect a critical breakthrough, and it could become the proverbial straw to break the camel’s back—creating a significant incentive for others of the city’s tens of thousands of creditors to work out a deal with the city, rather than cross their fingers in hopes of a potentially favorable ruling by U.S. Bankruptcy Judge Steven Rhodes.  Continue reading