Ambac Assurance, an insurance company that backs more than $170 million in Detroit bonds, announced Monday night that it opposes Emergency Manager Kevyn Orr’s attempt to restructure the city’s finances.
Nathan Bomey of the Free Press writes that the rejection appears to place the city one step closer to the largest municipal bankruptcy in U.S history.
Ambac said in a written statement Monday night that it does not agree with Orr’s plan to treat general obligation bondholders the same as unsecured creditors.
The company didn’t say what it plans to do next. But it did announce the hiring of Harrison J. Goldin of Goldin Associates. Goldin is a former New York City comptroller who played a key role in New York’s financial restructuring in 1970s.
“Michigan is making a grave error in its support for the proposed treatment of the general-obligation bonds,” Goldin said in the statement. “It is short-sighted to signal to lenders that they cannot trust the city’s unconditional pledge to repay its general-obligation debts.”
