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 The city's Emergency Manager Kevyn Orr presented a proposed debt
adjustment plan to creditors participating in court-ordered
mediation. The proposal provides "fair and equitable treatment" for
all parties, Orr said in a statement.
The plan, which the city said reflects discussions held to date with
creditors, was distributed to creditors on a confidential basis. The
city said changes could still be made before the plan is scheduled
to be unveiled in court no later than March 1, an occasion that will
mark a major milestone in Detroit's bankruptcy case.
"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," Orr said in the statement.
Detroit, which faces the March 1 deadline to submit a plan for
emerging from municipal bankruptcy, said it expects to file one with
the U.S. Bankruptcy Court in about two weeks.
With the city sinking under a debt load topping $18 billion, Detroit
filed the biggest municipal bankruptcy in U.S. history in July.
Pension funds, retirees, and bond holders are among Detroit's major
creditors.
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Prior to the filing, Orr, a former corporate bankruptcy attorney,
put out a proposal to creditors that called for paying just pennies
on the dollar for some $11.5 billion of debt considered unsecured.
That debt included a $3.5 billion unfunded liability for the city's
two pension systems, as well as $1.45 billion of pension debt and
certain general obligation bonds sold by Detroit.
U.S. Judge Steven Rhodes in December ruled that Detroit is bankrupt
and that the city could cut pension benefits as part of its
restructuring.
(Reporting by Karen Pierog; editing by Bernard Orr)
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