Just thought it would be a good idea to create one mega thread to discuss Detroit's ongoing financial crisis, instead of several smaller threads.
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Just thought it would be a good idea to create one mega thread to discuss Detroit's ongoing financial crisis, instead of several smaller threads.
Per my sources, Orr has received a temporary restraining order by a judge to have $11 Million Dollars of the $170 Million Dollar in Casino tax revenue that's going to UBS and BofA debt payments instead go into city's General Fund.
Potential big news?
Quote:
Orr reaches settlement with some Detroit creditors
http://www.freep.com/article/2013071...roit-creditors
Giant news. It means that some of the negotiators have shifted from arms crossed to shaking hands with the enemy. I'm less familiar with the dynamics of these talks but my understanding is that as more people start taking deals that will pressure creditors to either start taking deals or it will pressure a bankruptcy judge to cram down the proposal to everyone else left.Quote:
Originally Posted by begingri
Would love to hear from someone more familiar with this field.
Buried in the middle of a Detroit News article on 7/17/13 about the complications of a Detroit bankruptcy, the "settlement" was apparently for the same $11 Million Orr previously requested and the $39 Million Dollars in payments he defaulted on.Quote:
Originally Posted by begingri
So yeah, we're still in square one. But you gotta just love how the way the media presents a story can make the story seem completely different to the reader than what it actually is.
And also, this debt wasn't included in the restructuring proposal Orr submitted.
"Details emerged Tuesday about a settlement Orr reached with two Detroit creditors — Bank of America Corp. and UBS AG, which have agreed to accept 75 cents on the dollar for approximately $340 million in swaps liabilities, according to a source familiar with the deal."
What happened to that 90 cents on the dollar haircut? At this rate, Orr will have next to nothing in new revenue to put towards city services as outlined in his plan of action.
90 cent on the dollar haircut was for unsecured debt. The fact that even secured debt is getting renegotiated illustrates how drastic the situation is. This would equate to having a $100,000 mortgage on a house appraising for $100,000, then going to the bank and asking them to cut the debt to $75,000, claiming that if they don't, the house value will drop to $50,000 and they'd get even less in foreclosure.Quote:
Originally Posted by Novine
This!Quote:
Originally Posted by corktownyuppie
This places the CEILING for unsecured debt at 75 cents on the dollar.
Considering that, I believe, the Jefferson County unsecured creditors got 80 cents on the dollar, this is huge news, as the ceiling is lower than the floor for the next lowest case.
Huge news, IMO.
Exactly. I'm actually surprised they took less than 100%. Damn. This bodes well for Orr.Quote:
Originally Posted by corktownyuppie
Orr had already defaulted on these debts, or received a restraining order to stop payments to them. The creditors have simply agreed to him doing so.
It doesn't even put a dent in Detroit's debt. But, as someone said, it does set a ceiling so when Detroit files for bankruptcy.
Agreed. Bankruptcy is inevitable. Too much debt to get out under from.Quote:
Originally Posted by 313WX
I thought Orr defaulted on unsecured debt only? The TRO was to stop Syncora from withholding funds to Detroit. Syncora got casino revenue and then paid the remainder to Detroit. We didn't withhold money from them, they withheld money from us.Quote:
Originally Posted by 313WX
Yes, he'd already defaulted on them. But they were secured by revenues that creditors are now walking away from. That ceiling and how it applies to the rest of negotiations will be interesting.Quote:
Originally Posted by 313WX