Orr halts payment on city's debt; legal battle expected over pensions, health care (Detroit)

[alp227]

Source: Detroit Free Press

Emergency manager Kevyn Orr’s extraordinary, complex and painful road back to solvency for the City of Detroit revealed Friday in a proposed plan to creditors promises at the same time to be a path to improve public services that would in turn create growth for the Motor City.

Orr’s plan would spin off the city’s water department so it can generate revenue; reduce city-provided health care for retirees and current workers and immediately stop most debt payments. The money for those payments would instead be used to keep the city operating while reinvesting $1.25 billion over the next decade to boost crucial services such as police and fire. It also would step up blight removal efforts and transform the operations of an antiquated city government.

The impact of the document Orr released Friday to creditors and the public cannot be overstated.

Orr, a bankruptcy lawyer, and his team discussed a staggering amount of liabilities — as much as $20 billion — Friday as they met with as many as 150 representatives of creditors called together at the Westin hotel at Metro Airport in a bid to win an out-of-court settlement of the city’s debt, or, if not possible, go into a municipal bankruptcy proceeding with most creditors agreeing to deals before a Chapter 9 petition is filed.

Read more: http://www.freep.com/article/20130615/NEWS01/306150012/

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See also: Kevyn Orr laying groundwork for potential Detroit bankruptcy from the DFP Business section.

Matt Helms, DFP reporter who co-wrote this report, was on the PBS NewsHour on Friday (transcript) discussing his story:

[blkmusclmachine]

1. Austerity Now! Austerity Forever!

We're all Germans now

[quadrature]

2. better idea than bankruptcy ...

demolish the whole place
and use the land as a
moose preserve.

everybody wins.

[Cal Carpenter]

3. Wow that's a really fucked up way to look at it

I suppose all those folks in Detroit aren't counted in your definition of 'everybody'.

Because they are...what...poor? Black?

[No Vested Interest]

4. Not a better idea... nt.

[navarth]

5. Speaking as a native Detroiter

I believe you can take your ignorant hurtful comment and stick it where it will do the most good.

If you're going to be an asshole, why not do it quietly?

[Yo_Mama]

7. Except for those who live in Detroit?

Your theory is that you have to destroy the village to save it?

[Rebellious Republican]

9. A moose preserve huh, and hey maybe Sarah Palin could be the mayor.

[navarth]

6. "....spin off the city’s water department..."

At last they come out and reveal what they want. The suburbs have had their eyes on The Water Works for decades, this is them coming in and taking it now that they have Snyder in office. I've been expecting this.

[cstanleytech]

8. Why would they spinoff the water dept rather than keep it to earn revenue for the city????

[Rebellious Republican]

10. Because water is the new Gold or Oil as the case may be.

Here is what the capitalist bible (The Wall Street Journal) has to say about it......

SAN LUIS OBISPO, Calif. (MarketWatch) — “Is water the gold of the 21st century?” asks Fortune. Answer: Yes, water is the New Gold for investors this century.

http://www.marketwatch.com/story/water-is-the-new-gold-a-big-commodity-bet-2012-07-24