Kevyn Orr
A blueprint for Detroit's bankruptcy favors pension funds "slightly more" than bankers and bondholders, according to the Free Press.
A draft of Kevyn Orr's bankruptcy plan, called a plan of adjustment, was released to creditors Wednesday. It proposes the city's first offer to creditors, but could change as bankruptcy proceedings continue.
One person familiar with the draft, who asked not to be identified, said the pension funds would be favored slightly, receiving around 25% of money owed to the funds, compared with about 22% for other unsecured creditors, including bondholders whose repayments aren’t tied to specific city revenue streams.
Given wide disagreements between Orr’s team and pension funds, it’s still not clear how much of a cut pension funds would be asked to take. Orr has said the funds have a combined underfunding of about $3.5 billion, while the pension systems say it’s much lower.
The plan is expected to be released publicly in two weeks.
