Feb. 21 (Bloomberg) — Detroit's plan to end its $18 billion bankruptcy assumes bondholders offered 20 cents on the dollar will eventually swallow a deal that guarantees police and firefighters collect 90 percent of their pensions.
The city's debt-adjustment plan, filed today in U.S. Bankruptcy Court in Detroit, is built on $820 million in contributions from private foundations and the state. Those groups say no money will flow without a settlement that protects the city's valuable art collection from liquidation by bondholders and other creditors.
Within hours of the plan being filed, the creditors that city officials must win over rejected the proposal, even as they continue talking behind closed doors. Unions and bond insurers both registered their displeasure.
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