|Detroit skyline by D rek/flickr|
A fresh settlement between Detroit and two global banks to erase a Wall Street bet that overwhelmed the city’s budget could be the first crucial element of the city’s Chapter 9 bankruptcy restructuring.Hopefully in the near future there will be further details!
The amount of the new deal is still confidential, and it still needs judicial approval. It comes as emergency manager Kevyn Orr is putting the finishing touches on a comprehensive restructuring proposal that’s expected to be released this week.
With more than 100,000 creditors waiting to see what the city is expected to offer — and 700,000 residents hoping for a better city — Orr is expected to propose dramatically slashing its $18 billion in debt and liabilities and redirecting cash to core services, including police, fire and blight removal.
“If there’s one thing certain about the plan that will be filed shortly, it’s going to change many things very substantially,” said Bruce Bennett, an attorney for Jones Day, Detroit’s lead bankruptcy law firm