Detroit's Emergency Manager Meets With Creditors

fromMR

Kevyn Orr will ask unions, retirees and banks to take big losses on debt the city just can't afford to pay. But Orr is walking a fine line trying to convince those parties to accept a bankruptcy-style settlement, without actually going to bankruptcy court — at least, not yet.

Copyright © 2013 NPR. For personal, noncommercial use only. See Terms of Use. For other uses, prior permission required.

LINDA WERTHEIMER, HOST:

The man with the power to shape Detroit's future sits down today with the city's creditors.

Emergency Manager Kevyn Orr will ask unions, retirees, and banks to take big losses on debt that Detroit just can not afford to pay.

But, as Michigan Radio's Sarah Cwiek reports, Orr is walking a fine line - using the threat of bankruptcy in order to avoid it.

SARAH CWIEK, BYLINE: Kevyn Orr laid out a dire, but now-familiar picture of Detroit's finances at a public meeting earlier this week. The city is technically insolvent already. It doesn't take in enough money to pay its current bills, much less the estimated $15 billion in long term debt on its books.

So Orr's main job as Detroit's state-appointed emergency manager is to wipe out as much of that debt as he can.

KEVYN ORR: This path will require painful sacrifices from all interested parties. This is not going to be easy. It took us a long time to get here, and to get us out of here is going to take some very difficult decision-making and agreements.

(SOUNDBITE OF PROTESTERS)

UNIDENTIFIED GROUP: Wall Street bankers got to go.

CWIEK: Protesters representing Detroit's workers and retirees also showed up at Orr's public meeting. They fear that Orr will end up paying off some of Detroit's creditors - big banks representing the city's bondholders - while workers and pensioners eat the biggest losses.

Those protesters will be at it again today, when Orr gathers all those creditors to lay out his go-forward plan for the city.

Orr spokesman Bill Nowling says the emergency manager is trying to treat everyone equally.

BILL NOWLING: We're going to be asking tough things of unions. We're going to be asking equally tough things of banks. And we want them to be in the same room, to understand this is not a business, this is a city.

CWIEK: A city in dire economic straits.

And it's Orr's job to convince those creditors he'll give them a better deal than a bankruptcy judge would.

For NPR News, I'm Sarah Cwiek in Detroit.

Copyright © 2013 NPR. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to NPR. This transcript is provided for personal, noncommercial use only, pursuant to our Terms of Use. Any other use requires NPR's prior permission. Visit our permissions page for further information.

NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR's programming is the audio.

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.