Now comes the harder part -- a phrase likely to apply repeatedly as Detroit emergency manager Kevyn Orr negotiates partial payback terms with city creditors in hopes of averting a historic big-city bankruptcy.
John Gallagher and Mark Stryker look at his high-stakes challenge in the Free Press as part of a multi-story Page One report.
Orr meets with creditors later this week in a crucial step to restructure the city’s finances and stave off the largest municipal bankruptcy in American history. . . .
The pain, however, will likely travel well beyond the closed circle of those in the room with Orr. He has made it clear that as he seeks cash to make a deal, all of the city’s assets are on the table, including the city-owned world-class collection at the Detroit Institute of Arts, public parks — including Belle Isle — and city departments, such as water and sewerage. . . .
The Free Press reported Friday that Orr will offer less than 10 cents on the dollar to as many as 150 representatives of the city’s major creditors — from Wall Street bondholders and insurers with billions of dollars on the table to unions representing city retirees now relying on pensions and health care for their livelihood to current city workers with their promised future benefits at stake. . . .
The reality is this: Given the usual pecking order in a bankruptcy case, Wall Street bondholders and even bankruptcy attorneys will be the first in line to recover any of the money that might be made from selling irreplaceable art from the DIA, public parkland or any other city asset.
Detroit's stability affects Southeast Michigan's quality of life.
In an accompanying column, editorial page editor Stephen Henderson frames the painful process as the inevitable result of "irrationality."
This is what happens when you systematically disinvest from a region’s core city over half a century, while the suburbs grow and regional leaders cheer the economic and social divide that opens up and swallows the area’s vitality.
This is what happens when those left behind in the city borrow 33 times what the whole place is worth, and continue to make promises — to employees and residents — that are the most irresponsible form of economic fantasy.
And this is what happens when the bill for all that irrationality comes due.
The article by Gallagher and Stryker, headlined "A city in the balance," lays out the pecking order of "who is first in line for Detroit’s limited cash." A local bankruptcy attorney explains the process that will have an impact beyond Detroit.
Those affected include "the broader population of southeast Michigan, whose quality of life also remains tied to a healthy Detroit with all of its assets intact," the reporters write.
