Detroit manager: Bankruptcy plan weeks away

January 21, 2014 • Business

Michigan Gov. Rick Snyder delivers his State [auth] of the State address to a joint session of the House and Senate, Thursday, Jan. 16, 2014, in the House Chambers of the state Capitol in Lansing, Mich. (AP Photo/Al Goldis)

DETROIT (AP) — A plan to take Detroit out of bankruptcy won’t be ready this month, city Emergency Manager Kevyn Orr said Tuesday.

Gov. Rock Snyder met with top lawmakers Tuesday in Lansing on a multi-hundred-million-dollar plan to protect pensioners and the holdings of the Detroit Institute of Arts as Detroit moves through bankruptcy proceedings.

Orr had promised a plan by January, but negotiations between Detroit and creditors have changed the timetable. Orr called the talks “robust” and said he hopes they wrap up by mid-February. Orr spoke Tuesday at an advisory board that is monitoring Detroit’s finances, The Detroit News said.

A federal bankruptcy judge last week rejected a $165 million settlement that would have released Detroit from an unfavorable deal with banks. Judge Steven Rhodes said it was too generous for banks.

Orr said he will decide soon whether to sue the banks as a way to reach a compromise. Orr’s team has suggested that the deal hatched years ago was illegal.

Snyder has proposed a $350 million, 20-year state commitment, matching pledges from foundations to fund Detroit’s pensions and prevent the sale of city-owned art.

The Republican governor met Tuesday with Senate Majority Leader Randy Richardville, R-Monroe; Senate Minority Leader Gretchen Whitmer, R-East Lansing; House Speak Jase Bolger, R-Marshall; and House Minority Leader Tim Greimel, D-of Auburn Hills.

“Obviously we’re interested in continuing discussions and dialogue and seeing if there might be a way to protect the retirees, while putting in place safeguards to make sure Detroit makes better financial decisions moving forward,” Greimel told the Detroit Free Press.

Greimel said an announcement might come this week from Snyder’s office about a deal covering the pensions and the art.

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