Shoemaker asked Orr about his quote of this not being a plebiscite that it applied to the June 14th restructuring proposal is that true?:

Orr:” anyone who says that is taking that out of context.”

After the June 14th restructuring plan’s release shoemaker asked: Did you not want to negotiate with the city’s unions as part of this plan?

Orr: "Absolutely not! We were looking to negotiate the next week. We were looking forward to counter proposals." He went on, and he said “All interested parties had opportunities to prepare for his presentation. We anticipated sophisticated parties had two years to prepare and would be coming to us with proposals. None ever came."

Shoemaker showed on a screen in the courtroom the June 14th turnaround plan Orr gave creditors at Metro airport. They went over page 61 section 9 of the proposal. Orr said “It sets out a timetable how we are going to set out information. We were going to evaluate those discussions in mid-July or so.”

Shoemaker: "How much time do you think you had."

Orr: "I said I was running out of time. The powers expired Sept. 2014. Anyone paying attention we had been the time had come to make some decisions. We were in a financial emergency."

Shoemaker: "On June 14, 2013 did you think the city had to file for Chapter 9?"

Orr: "No. I thought that given the state of affairs in the city, given the apparent condition of the city, the bumpers in the police cars were falling off, you cannot say nothing can be done." He said he thought a negotiated settlement was possible.

 

10:15 AM --

Shoemaker wanted to know if the city’s financial condition had improved at all. He asked “is the city still deferring payments?”
Orr: "Oh yes. Payments to trade creditors are still behind, payments to parts suppliers and supply contracts. There are contractors that helped build the new Detroit Police Headquarters."

Shoemaker is not in the process of breaking down the complicated Syncora “swaps” deal. Orr is trying to set up a way to free up casino revenue being captured by a couple of banks as a way to rebuild the city by having two banks take 25% haircuts on their swap deals struck during the Kilpatrick administration. The city council voted against this deal last week. Orr is now testifying that he traded “nastygrams” with Syncora attorneys who were fighting the deal. He said as much difficulty as he was having with Syncora attorneys who wanted to prevent or scuttle the deal he decided he needed to sue in court. He filed a complaint for a temporary restraining order against Syncora and was able to get it. Orr said in winning that case it started casino revenue streaming back into city coffers. Shoemaker asked “if the city had not gotten that TRO what would have happened?

Orr: “It would have been catastrophic.”” We would have lost $132 million dollars in casino money. “ “It would have been very dire.”

10:31 AM --


June 20th meeting We are working hard to try to get come concessions, were working with Bank of America and Merrill Lynch [in the swaps deal], as well as our willingness to default on the “Cox payment”. “I thought we were on a very tight timetable and we were serious about what we said and it was a time table we were going to stick to.

Shoemaker: “Did you tell them you would negotiate with them?

Orr: “No, what I told them was we would not waive our rights under the statute regarding collective bargaining for five years.” “We would be willing to have discussions short of calling it collective bargaining.” “I was trying to tell everyone the same thing… we are not waiving our rights under the statute. We want to have talks and negotiations.”

Shoemaker: “Did you ever tell any creditors you were not willing to negotiate?”

Orr: ” No.” “If anything, we told people were looking to hear counter proposals.” “What I said if there are any serious proposals I would be a phone call away. I would get phone calls I was involved in every stage in this process.”

Shoemaker: “Did you negotiate in good faith?”

Orr: “Yes I did.”

Shoemaker: "Did your team?"

Orr: "Yes"