Detroit defaults: “We’re tapped out,” creditors will get 10 cents on the dollar; community “blight fight” groups will get $ 500 million . . .

DETROIT (WWJ) – . . . Detroit Emergency Manager Kevyn Orr . . . sat down in a closed-door meeting with about 150 creditors, bond holders and unions to discuss the city’s fiscal situation, seeking concessions that would save Detroit millions of dollars in payments.

Perhaps the most dramatic aspect of his plan: Orr said, starting now, there will be a moratorium on debt payments for all unsecured funded debt. Creditors are being asked to take about 10 cents on the dollar of what’s owed them. Underfunded pension claims would get less.

This latest comes as Detroit continues to spend more money than it takes in as revenue. The city’s budget deficit could top $380 million by July 1, and Orr now estimates the city’s long-term debt at $20 billion.

As part of the proposal, Orr said he wants to invest $1.25 billion in the city for police and fire; and $500 million to fight blight.

“We’re tapped out,” Orr said.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>