In order to stave off an ugly Chapter 9 bankruptcy, Detroit's emergency financial manager is expected to offer the city's creditors "pennies on the dollar" when they meet for the first time next week, the Detroit Free Press reports.
They probably will not be satisfied with the offers Orr will present in a roughly 200-page document outlining the city’s assets and liabilities. The report will make the case for what Detroit reasonably can pay its creditors. People close to the proceedings told the Free Press the offer will be for less than 10 cents for every dollar the city owes. Orr’s office refused to confirm that figure.
Detroit's debts and liabilities could be as high as $17 billion. If Orr can't work out a deal and succumbs to filing for bankruptcy, it would more than triple the largest ever in the country's history, the Freep says.
The most staggering fact comes from Orr's spokesman Bill Nowling. He notes that the nearly insolvent city wouldn't be able to pay down all its debt even if it completely stopped providing all basic services and only paid down those obligations for 20 years.
(Photo courtesy of The Associated Press)