Click here to close now.

SYS-CON MEDIA Authors: Elizabeth White, Pat Romanski, Yeshim Deniz, Liz McMillan, Roger Strukhoff

News Feed Item

City of Detroit Files Amended Plan of Adjustment, Disclosure Statement

Contains additional detail on treatment to creditor classes, retirees and plans to invest $1.5 billion on improved services for residents

DETROIT, March 31, 2014 /PRNewswire/ -- The City of Detroit (the "City") today filed an amended plan of adjustment (the "Plan") and a related disclosure statement (the "Disclosure Statement") with the U.S. Bankruptcy Court for the Eastern District of Michigan.  The filing offers additional details about the:

  • Proposed $816 million settlement to help fund public employee pensions and preserve the collection of the Detroit Institute of Arts for the benefit of the public.
  • Settlement with the counterparties to the swaps related to the City's pension certificates of participation.
  • Revised classification and treatment of various impaired creditor classes in the Plan.

In all, the amended filing offers greater detail regarding the Plan the City first proposed on Feb. 21 and the City's restructuring efforts.  The City expects to file further amendments to the Plan and Disclosure Statement before the scheduled April 14 hearing to approve the final Disclosure Statement to reflect further developments in the City's Chapter 9 case.  The City looks to exit its historic bankruptcy by late summer as a fiscally solvent municipality that is better able to provide basic services to its residents.

"The City continues to make progress with its creditors and retirees and hopes to reach agreement in the near term on a number of outstanding issues," said Kevyn D. Orr, Emergency Manager for the City of Detroit.  "We believe that the Plan we have proposed, and continue to refine, is feasible and allows the City to reduce its staggering $18 billion in debt and live within its means.  The Plan puts the focus back on providing essential public services to the City's nearly 700,000 residents."

Substantive changes or additions to the revised Plan and Disclosure Statement include:

  • Detailed terms of the negotiated settlement between the City and UBS and Merrill Lynch over pension interest rate swap agreements on pension obligation certificates. Under this agreement, the City agrees to pay $85 million (down from $288 million) to settle the claims, and the counter parties agree to relinquish their interest in the City's casino tax and development revenue, currently worth at least $15 million a month, once the settlement amount is fully paid.  UBS and Merrill Lynch also agree to vote in support of the Plan during the confirmation period.
  • Creation of a separate class of impaired creditors holding claims related to retiree health, dental, vision and death benefits.  This new impaired class will be treated the same way as other non-pension unsecured classes of claims. 
  • Greater clarification for retirees on how much pension benefit reductions would be should the two pension classes accept or reject the Plan (and the proposed $816 million in outside funding).  Very generally speaking, for Police and Fire Retirement System participants, a 'Yes' vote would mean a pension benefit reduction of 6 percent and elimination of cost of living adjustments; a 'No' vote would entail a 14 percent benefit reduction and elimination of cost of living adjustments.  Very generally speaking, for General Retirement System participants, a 'Yes' vote would mean a 26 percent pension benefit reduction and elimination of cost of living adjustments; a 'No' vote would mean a 34 percent pension benefit reduction and elimination of cost of living adjustments.

Copies of the Plan and Disclosure Statement, along with additional information and links related to the Chapter 9 case, can be found at http://www.detroitmi.gov/EmergencyManager.aspx.  Bankruptcy Court filings are available online, free of charge, at http://kccllc.net/Detroit.

Miller Buckfire & Co., Jones Day, Ernst & Young and Conway MacKenzie Inc. are advising the City of Detroit on its restructuring.

SOURCE City of Detroit

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo in Silicon Valley. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 17th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading in...
MeriTalk, a public-private partnership focused on improving the outcomes of government IT, today announced the results of its new report, "The Agile Advantage: Can DevOps Move Cloud to the Fast Lane?" The study, underwritten by Accenture Federal Services, reveals that approximately two-thirds of Feds say DevOps will help agencies shift into the cloud fast lane - improving IT collaboration and migration speed. But help is needed, with 66 percent saying that their agency needs to move IT services ...
Wearable devices have come of age. The primary applications of wearables so far have been "the Quantified Self" or the tracking of one's fitness and health status. We propose the evolution of wearables into social and emotional communication devices. Our BE(tm) sensor uses light to visualize the skin conductance response. Our sensors are very inexpensive and can be massively distributed to audiences or groups of any size, in order to gauge reactions to performances, video, or any kind of present...
The true value of the Internet of Things (IoT) lies not just in the data, but through the services that protect the data, perform the analysis and present findings in a usable way. With many IoT elements rooted in traditional IT components, Big Data and IoT isn’t just a play for enterprise. In fact, the IoT presents SMBs with the prospect of launching entirely new activities and exploring innovative areas. CompTIA research identifies several areas where IoT is expected to have the greatest impac...
There is little doubt that Big Data solutions will have an increasing role in the Enterprise IT mainstream over time. 8th International Big Data Expo, co-located with 17th International Cloud Expo - to be held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA - has announced its Call for Papers is open. As advanced data storage, access and analytics technologies aimed at handling high-volume and/or fast moving data all move center stage, aided by the cloud computing bo...
Every day we read jaw-dropping stats on the explosion of data. We allocate significant resources to harness and better understand it. We build businesses around it. But we’ve only just begun. For big payoffs in Big Data, CIOs are turning to cognitive computing. Cognitive computing’s ability to securely extract insights, understand natural language, and get smarter each time it’s used is the next, logical step for Big Data.
Move from reactive to proactive cloud management in a heterogeneous cloud infrastructure. In his session at 16th Cloud Expo, Manoj Khabe, Innovative Solution-Focused Transformation Leader at Vicom Computer Services, Inc., will show how to replace a help desk-centric approach with an ITIL-based service model and service-centric CMDB that’s tightly integrated with an event and incident management platform. Learn how to expand the scope of operations management to service management. He will al...
Enterprises are fast realizing the importance of integrating SaaS/Cloud applications, API and on-premises data and processes, to unleash hidden value. This webinar explores how managers can use a Microservice-centric approach to aggressively tackle the unexpected new integration challenges posed by proliferation of cloud, mobile, social and big data projects. Industry analyst and SOA expert Jason Bloomberg will strip away the hype from microservices, and clearly identify their advantages and d...
We are reaching the end of the beginning with WebRTC, and real systems using this technology have begun to appear. One challenge that faces every WebRTC deployment (in some form or another) is identity management. For example, if you have an existing service – possibly built on a variety of different PaaS/SaaS offerings – and you want to add real-time communications you are faced with a challenge relating to user management, authentication, authorization, and validation. Service providers will w...
The 4th International Internet of @ThingsExpo, co-located with the 17th International Cloud Expo - to be held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA - announces that its Call for Papers is open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
DevOps Summit, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 17th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long developmen...
The 5th International DevOps Summit, co-located with 17th International Cloud Expo – being held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA – announces that its Call for Papers is open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the...
As the world moves from DevOps to NoOps, application deployment to the cloud ought to become a lot simpler. However, applications have been architected with a much tighter coupling than it needs to be which makes deployment in different environments and migration between them harder. The microservices architecture, which is the basis of many new age distributed systems such as OpenStack, Netflix and so on is at the heart of CloudFoundry – a complete developer-oriented Platform as a Service (PaaS...
In high-production environments where release cycles are measured in hours or minutes — not days or weeks — there's little room for mistakes and no room for confusion. Everyone has to understand what's happening, in real time, and have the means to do whatever is necessary to keep applications up and running optimally. DevOps is a high-stakes world, but done well, it delivers the agility and performance to significantly impact business competitiveness.
17th Cloud Expo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterprises a...