DETROIT - Detroit's Emergency manager is getting the city's financial house in order - possibly preparing for the largest municipal bankruptcy in history:
Local 4 has confirmed that Kevyn Orr is going to the city's creditors and preparing to offer them just pennies on the dollar of what the city of Detroit owes them.
Some reports are saying a few cents on the dollar. Local 4 has learned if a creditor is owed a dollar, Detroit will offer just ten to twenty cents.
It is a dramatic move that city leaders haven't addressed in years. Orr is doing the heavy lifting politicians simply wouldn't. This morning the Detroit News is reporting at Orr is gathering the creditors - big banks who gave the city huge loans, bond holders and insurers at metro airport on Friday June 14 to give them the bad news. About 150 creditors and representative of some of the city's largest unions are expected to attend.
If they turn Orr's low ball offer down they will roll the dice in bankruptcy court - where they may get even less. If a Chapter 9 comes, creditors will be looking for cash from the city.
Among the possibilities that may help Detroit deal with that debt is selling some of the artwork owned by the Detroit Institute of Art. The question now is if there is anything that really can be done. The state legislature is looking at passing a law that would try to prevent a sale. However, legally that may not hold up.
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