EM Orr set to meet with Detroit's creditors
Emergency manager meeting with creditors to show depths of Detroit's financial troubles
DETROIT (AP) -- When state-appointed emergency manager Kevyn Orr meets with Detroit's creditors and bond debt holders, he plans to lay out for them the depths of the city's financial collapse.
Friday's meeting at the Westin Hotel at Detroit Metropolitan Airport in Romulus is part of the process of trying to keep the city out of municipal bankruptcy, Orr spokesman Bill Nowling said.
"The city is in dire financial straits," Nowling told The Associated Press. "This is the first step in righting the course."
The meeting requests were sent out Thursday to the U.S. Bank National Association, U.S. Bank Trust National Association, Financial Guaranty Insurance Co., Amalgamated Transit Union, police and firefighters associations, and various other unions.
Orr is seeking significant concessions for the city, which has a budget deficit that could reach $380 million by July 1 and long-term debt estimated at more than $14 billion.
Nowling would not release details of the meeting and would not confirm or deny that the debt holders will be asked to accept cents on the dollar to help Detroit avoid further fiscal ruin.
Ed McNeil, spokesman for American Federation of State, County & Municipal Employees Council 25, said Sunday that he is not sure what Orr will present.
"Nothing good is going to come out of the meeting for us at all," he said. "This is still busting the unions and taking the assets."
Health care benefits for current employees and retirees continue to be a target for cuts and givebacks, McNeil added.
But a plan that included $60 million in cost savings from 33 unions for which he negotiates failed to go before the City Council last spring for a vote, he said.
"This is a whole charade," McNeil said. "They are trying to get people to believe it's health costs that are hurting the city."
He said Orr is saying, "if you don't do what we want we are going to Chapter 9 bankruptcy."
Orr, a Washington-based bankruptcy lawyer and turnaround specialist, was chosen by Gov. Rick Snyder to fix Detroit's finances and hired in March by a state loan board. Orr has said he wants to avoid municipal bankruptcy.
He also has scheduled a public informational meeting Monday evening at Wayne State University. The meeting is required under Michigan's Local Financial Stability and Choice Act.
