Detroit EM says bankruptcy filing unavoidable - New York News

Detroit EM says bankruptcy filing unavoidable

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DETROIT (AP) -

Detroit's emergency manager testified Monday that he had thought as late as June that a bankruptcy filing could be avoided but that he knew time was running out for the city and its creditors to agree to concessions.

Testifying on the fourth day of a trial to determine whether Detroit is eligible to fix its finances in bankruptcy court, emergency manager Kevyn Orr said he received a couple of counter-proposals from creditors, but none from unions or retirees before filing for bankruptcy protection in July.

"Anyone paying attention knew the time had come to make some very difficult decisions," Orr said of a June meeting with hundreds of the city's creditors. "We were in a financial emergency and were going to have to move very quickly."

Detroit must show it is broke and tried in good faith to negotiate with creditors. Attorneys who oppose the filing seeking the largest municipal bankruptcy protection in U.S. history have tried to build a case that bankruptcy was a predetermined course or inevitable outcome.

Orr said Friday that filing for bankruptcy wasn't a condition of his employment. He is expected to be grilled by attorneys representing unions and pension funds, who say the city didn't hold genuine talks and therefore the case should be thrown out.

He said Monday that after he took the job he saw firsthand the high crime, blight and deplorable conditions of police equipment and facilities in Detroit.

"I knew things were bad," Orr testified. "It was somewhat shocking ... just how dire it was."

Orr, a bankruptcy expert who represented automaker Chrysler LLC during its successful restructuring, has said the city is saddled with $18 billion in long-term debt. He and Police Chief James Craig both have testified about the city's dire straits.

"Detroit spends more than it takes in. It is clearly insolvent on a cash-flow basis," Orr testified as he read from a report he issued in spring after 45 days as emergency manager.

Republican Gov. Rick Snyder also is expected to testify Monday. The trial could end next week, but a decision on Detroit's eligibility appears to be several more weeks away. The judge has set a Nov. 13 deadline for lawyers to file legal briefs on certain issues.

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  • Firefighters rescue crane operator

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  • Police: Man drives off NY bridge, dies

    Police: Man drives off NY bridge, dies

    Wednesday, July 30 2014 6:10 AM EDT2014-07-30 10:10:33 GMT
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  • Aire Ancient Baths

    A relaxing bathhouse in busy Tribeca

    A relaxing bathhouse in busy Tribeca

    Tuesday, July 29 2014 10:29 PM EDT2014-07-30 02:29:51 GMT
    Deep beneath the hustle and bustle of Tribeca lies a modern-day oasis brimming with old world charm: Aire Ancient Baths, my new favorite city escape. The breathtaking spa is illuminated by hundreds of candles and smells of invigorating eucalyptus. For around $80 you can bathe in the tranquil blue pools for 90 minutes and find the temperature that's right for you.
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