Skip to comments.Detroitís Creditors Are Asked to Accept Pennies on the Dollar
Posted on 06/15/2014 2:19:43 PM PDT by Citizen Zed
The emergency manager who was sent to reverse the fortunes of this financially troubled city asked some of its creditors on Friday to accept pennies on the dollar as he laid out his plan for tackling Detroits staggering debt, kick-starting negotiations that could determine whether the city is headed to bankruptcy court.
Presenting a grim take on the citys fiscal standing in a closed-door meeting, the emergency manager, Kevyn Orr, a bankruptcy lawyer from Washington who was appointed in March, made a case to dozens of bondholders and union leaders that deep cuts alone cannot save Detroit. He said that painful sacrifices must be shared.
(Excerpt) Read more at mobile.nytimes.com ...
Loan money to crack addicts, expect to get burned.
I thought they had already filed for bankruptcy.
And cuts to insane public union pensions???
NOT pennies on the dollar (even though they are unsecured creditors)...
Asking the union thugs to make “painful sacrifices” is like asking a pigeon to lay a three cheese omelette.
They did file nearly a year ago.
The process is grinding along....
These are negotiations to exit BK.
Lots of expensive paintings in the city-owned museums and the like. These ‘stake-holders’ are likely to be wondering why these are not sold first!
From the “Paris of the West” to “Deadbeat on the Border!” When was the last balanced fiscal budget passed?
Banks kept buying Detroit bonds, booking both the fees, and the expected revenues, even while the status of Detroit’s Finances were widely known.
Obviously, the expectation was of yet another big taxpayer bailout.
This should be HUGE red flag to buyers of California bonds, or the bonds of any other Dem-run hellhole, but it won’t be. The fees for those bonds, and the commissions paid on those fees, get booked in THIS quarter.
What happens in 7 or 8 quarters is someone else’s problem.
No union leader is going to accept voluntary cuts to union pensions. Unless the rest of us make up the difference. Welcome to Democratland.
The retired employees of the city of Detroit should sue the Democrat Party. They caused this mess and they have lots of money.
Bankrupt= you’ll take what we give you. ..
If Obama steps in on behalf of the unions as he did with GM and Chrysler, they'll end up buying off on the plan.
While the individual union members aren’t completely innocent, they are about the least guilty. They didn’t write the contracts or sit in negotiations. They voted for the most that was offered to them. Despite the self righteous outrage of most FReepers, 99% of us would do the same. I’ve never seen anyone, union or non union turn down a raise because it will hurt the bottom line of the company.
The truly guilty are those who sat in air conditioned conference rooms and worked on contract negotiations. They all saw the bottom line and knew it was unsustainable but they agreed because it was all about power (and likely fair sized sums of money via corruption).
As far as the creditors are concerned, the rest of us saw where this was headed at least 20 years ago. The creditors saw it too but expected “someone” to step in and pay them off. In doing so, they just kept feeding fuel to the fire.
Oh I’m sure this makes a lot of other cities very nervous because they’re even deeper in debt and their creditors have reason to believe they may not get a bailout either.
The wages of socialism...YOU GOT PLAYED...
“least guilty”, “truly guilty”, etc.
Sort of pregnant, partially pregnant, least pregnant, truly pregnant, etc.
Quibbling to a fault?
Its called telling the truth when few have the stones to do so.
Of course the Rat Party unions will get every penny of their bloated salaries/pensions.It’s poor slobs like independent snow plow drivers who’ll get 0.5% of what they’re owed.
Coming to everywhere. Bondholders take haircuts, pensioners take haircuts, and useless regulatory offices must be closed.
What they are guilt of, is that when the union bosses said "vote democrat" they duly lined up and and voted democrat as a block. This gave the unions enormous, undeserved power.
And, they knew all along that this boosted their pay well above what other guys in other unions had, and their pensions were also super-sized.
As far as "pennies on the dollar" I don't know what that is. Could be $0.02 to $0.99 on the dollar. Now, I don't have a government pension. So, I have to provide for myself. DW and I invest in the stock market to let our money try to keep up with inflation. But, there are no guarantees. When we lose 30-40% of our investments in a market downturn, we suck it up and get back in the game.
Every one of these guys who knows how to read knew their game was just as risky as the stock market. But, instead of accepting the challenge of providing for themselves, they just sat back and let the city provide for them. Well, the city didn't do a very good job of providing and I don't see any reason why they should not be on the hook too. At least to the point of a 30-40% reduction in pension. Don't take them down to nothing, but a substantial cut seems to be in order.
Maybe they have to retire in North Carolina instead of Miami Beach, but I bet 60% of their promised pension is still more than most Americans have.
“I thought they had already filed for bankruptcy.”
They did. This “news” article is dated Jun 2013!
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