Topics Drawing Current Attention
2030 Forecast 2016 Campaign China Education Detroit  TPP

July 17, 2013

Detroit: What Will Creditors Take

Orr will need to compromise with Detroit's creditors and it will be in the City's best interest to do so.

It is going to take leasing Belle Isle to the state, cutting a deal to unload the Detroit Water and Sewer Department, selling some assets at the Detroit Institute of Arts (DIA), having the creditors taking a haircut of closer to 30 cents on the dollar, restructuring the terms on the remainder of the debt and adjusting future retirement and health insurance benefits.  Some of the DIA assets should totally fund legacy costs already earned by the employees.

The real missing piece is there is no one talking about life after Orr. We have a city the size of Boston, San Francisco and Manhattan combined and a population less than 1/4th the size of these combined cities. Creditors will want to see a viable long term plan before making concessions. They are not going be be willing to reduce interest rates and principle balances while extending terms without feeling comfortable with the City's new philosophy and leaders.
More

No comments:

Post a Comment