Banks Get 60%, Retirees get 20%
And the banks helped create the problems through one sided deals with the Detroit. If anyone deserves a smaller cut, it’s the people who harmed the city not those who made life bearable for the citizens.
Judge Rules Detroit Is Trying To Give Banks ‘Too Much Money’
While the $300 million debt involved in Thursday’s decision is a tiny fraction of the city’s overall debt burden, the specifics of the debts involved here make this deal central to emergency manager Kevyn Orr’s plans for bringing Detroit out of bankruptcy. They come from a deal made by corrupt, jailed ex-Mayor Kwame Kilpatrick (D). Kilpatrick entered into risky deals that went bad, and because Kilpatrick used revenue from the city’s casinos as collateral for the loans, the banks have been able to keep Detroit from making use of casino money throughout the bankruptcy proceedings. A deal to resolve the interest rate swaps with UBS and Bank of America would bring that casino cash back into city hands, potentially financing much-needed quality-of-life improvements for city residents.
Orr first tried to pay the banks roughly 80 cents on the dollar to clear the debts. When Rhodes rejected that deal, Orr’s team came back with a revised proposal to pay 60 cents on the dollar for the debts. The same group of decision makers has proposed paying the city’s retired workers less than 20 cents on the dollar of what they are owed in pensions and health care benefits. Retirees told ThinkProgress that the health care cuts Orr proposes would leave some of them choosing between food and prescription medications, while others have%2