Detroit Files Plan To Restructure Debt, Leave Bankruptcy

Detroit's emergency manager filed a plan Friday to restructure the city's $18 billion debt by making cuts to pensions and creditors while offering a blueprint for emerging from the largest municipal bankruptcy in U.S. history.

An early draft of state-appointed Emergency Manager Kevyn Orr's plan called for city pensioners to receive $4.3 billion in payments and bondholders about $1.1 billion during the next 40 years. That draft also detailed plans to help pensioners keep more of what they are owed by using state and private funds to protect against the sale of city-owned art at the Detroit Institute of Arts.

"My advisers and I have now expended many months in negotiations, including within Bankruptcy Court-mandated mediations, with all classes of creditors to get to this point, and we are satisfied with the progress made thus far," Orr said in a statement. "However, there is still much work in front of all of us to continue the recovery from a decades-long downward spiral. We must move swiftly to emerge from bankruptcy so that the financial distress harming the City can end.

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