Emergency Manager Kevyn Orr is publicly pitching the $815 million fund that would cushion the blow to city pensioners even as it would protect the DIA’s collection from the predations of creditors, Daniel Howes writes in The Detroit News.
He adds:
But no one’s buying yet, a bigger problem for Orr and his team than it is for the foundations. Their boards have approved the outlays to the DIA fund, and their executives are heeding Rosen’s counsel to be patient and let the bankruptcy process unfold under the gavel of U.S. Bankruptcy Judge Steven Rhodes.
“It’s very clear some foundations are a little nervous that these folks are not jumping at the deal,” said a source close to the process. “There’s more than enough patience that no one is going to bolt. The foundations don’t want to be in the position of threatening pensioners.”
The emergency manager faces a September deadline when two-thirds of the City Council can vote to remove him; Judge Steven Rhodes' aggressive management of his court calendar recognizes that political reality, Howes writes, putting the court on a collision course with unions and pension funds waiting for Orr to improve an offer they expect to get better with time.
It won’t. Orr is more likely to dust off his game of hardball, a stock tactic in corporate Chapter 11 bankruptcies: reduce proposed settlements by a quarter point each day they are ignored and redistribute the savings to others within similar classes. And Rhodes, who clearly commands his courtroom, could force the issue, too, with a judicial power only he holds.
