DETROIT - Leading national and local foundations are offering millions of dollars to help Detroit's underfunded pension systems and the Detroit Institute of Arts as the city goes through Chapter 9 bankruptcy court.
According to the Detroit Bankruptcy Mediators, $330 million from such foundations has been committed so far. Moreover, Dr. Paul Schapp, of Grosse Pointe Park, has committed $5 million of his own money for the cause.
The Community Foundation for Southeast Michigan has been established to collect more voluntary private contributions. The mediators say to date the Community Foundation has attracted nearly 130 individual contributors.
The mediators are working to reach settlements in all claims in Detroit's bankruptcy. Closing arguments were set to start Monday morning in Detroit.
The city pledged casino tax revenue in 2009 as collateral to avoid defaulting on pension debt payments. The swaps allowed Detroit to get fixed interest rates on pension bonds with UBS and Bank of America.
Orr and the banks initially reached a $220 million payoff, but bankruptcy Judge Steven Rhodes ordered the city to negotiate a better deal.
A new $165 million deal to terminate the swaps agreement was reached late last month. Rhodes still has to approve the deal.
State appointed emergency manager Kevyn Orr has testified that the new proposal is best for the city.
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