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Detroit emergency manager Kevyn Orr’s plan to restructure Detroit’s finances could significantly effect unsecured bondholders and retiree benefits. Under his plan, Orr proposes that both unsecured bondholders (with about $2.5 billion in debt) and retiree benefits (with about $9 billion in obligations) would be cut to less than 10 cents on the dollar. Emotionally, 10 cents on the dollar is an extremely hard pill to swallow for everyone affected, including the unsecured bondholders and retirees. Economically, however, the stakeholders will need to determine if pennies on the dollar outside of bankruptcy makes more sense than the alternative under a chapter 9 bankruptcy filing. If Orr is unable to successfully negotiate a deal with stakeholders, the ultimate determination of whether Detroit files for bankruptcy remains with Governor Snyder.