City of Detroit Emergency Manager Presents Plan of Adjustment to Creditors
Plan Offers Fair and Equitable Treatment to All Creditor Classes
Plan Offers Best Path to Securing a Viable, Strong Future for Detroit and its 700,000 Residents
DETROIT, Jan. 29, 2014 /PRNewswire/ -- Kevyn Orr, the Emergency Manager for the City of Detroit ("Detroit" or the "City"), today presented to the City's creditors who are participating in the mediation conducted by Chief Judge Gerald E. Rosen, on a confidential basis, a Proposed Plan of Adjustment ("Plan"). The Plan outlines the treatment each class of creditors would receive for their claims in Detroit's restructuring under Chapter 9 of the U.S. Bankruptcy Code. The City currently intends to file the Plan, which may be further modified, in approximately two weeks with the United States Bankruptcy Court for the Eastern District of Michigan ("Bankruptcy Court").
Mr. Orr and his team believe the Plan offers the most effective and efficient way for Detroit to resolve its numerous issues, revitalize itself and continue with its efforts to once again become an attractive place in which to live, work and invest. The Plan distributed to creditors participating in the court-ordered mediation reflects some of the discussions the City and its creditors have held to date and offers a good platform for those discussions moving forward.
Mr. Orr and his advisers have been negotiating closely with all classes of creditors to pursue consensual agreements, with the goal of securing the long-term viability of Detroit and its 700,000 residents, while maximizing recoveries for the City's creditors in a reasonable and equitable fashion. The negotiations and the federal mediation process have been progressing well, as evidenced by the City's entry into a five-year contract with the City's EMS union. Also, the City is gratified by the tremendous efforts of the mediators in generating the proposed financial support by the State of Michigan and several philanthropic organizations that will help support the City's public employee pension funds and help resolve issues surrounding the Detroit Institute of Arts. Additional recent accomplishments in the restructuring process include an agreement to transfer the long-challenged City electrical grid to DTE Energy, and the beginning of blight removal and restoration of public lighting.
"Our focus has been to help Detroit regain a strong economic footing," said Mr. Orr. "There is much work still to do and we believe the proposed Plan provides the roadmap for all parties to resolve all outstanding issues and facilitate the City's efforts to achieve long-term financial health.
"While this process is not an easy one, I appreciate the concerns people in the Detroit metro area are facing as a result of the City's problems. Time is of the essence – the longer we remain entrenched in our positions and fail to reach an agreement, the worse life gets for Detroit's 700,000 residents and the greater our collective challenges become. We need to move quickly and efficiently. My team and I believe this Plan presents each interested party with fair and equitable treatment, and we look forward to working with our creditors to adopt this Plan and put Detroit back on the path to stability and success."
The City's website also contains information and links relating to the chapter 9 case. Bankruptcy Court filings are available online, free of charge, at http://kccllc.net/Detroit.
Miller Buckfire & Co., Jones Day, Ernst & Young LLP and Conway MacKenzie Inc. are advising the City of Detroit on its restructuring.
SOURCE City of Detroit