Comments Subscribe to Personal Liberty News Feed Subscribe to Personal Liberty

Detroit Runs Into Resistant Bondholders

DETROIT (UPI) — Detroit’s creditors have plenty of fight left in them to resist cuts in their investment returns, key observers of the city’s bankruptcy negotiations said.

“I would think ‘some’ pushback is wildly understating the pushback,” said Matt Fabian, the managing director of Municipal Market Advisors, a bond market research service.

The city is trying to restructure $18 billion in debts.

The Detroit News reported Wednesday that bondholders have been negotiating with Detroit officials in New York City, attempting to reach a consensus before the start of the Detroit International Auto Show, which opens on Monday.

Court appointed mediators are pushing for a deal, but creditor resistance remains strong, several key observers said.

“There’s no doubt that people would like to get the plan moving, but it’s not going to be settled that fast. There’s a lot of fight left to be had on this,” said Bill Brandt, a government restructuring consultant from Chicago.

A spokesman for Detroit’s emergency financial manager Kevyn Orr said there was still strong resistance to a haircut, the term used to describe losses creditors sometimes take in bankruptcy settlements.

“The bondholders are going to fight hard to make sure that they maintain their rights and they don’t lose anything in this. You’ve got three-dimensional chess going on. They’ve made it pretty clear they’re going to fight any efforts that would make them take less,” said the spokesman, Bill Nowling.

One one front, issuers of $6 billion in water and sewer bonds are resisting a plan to turn the city’s Water and Sewerage Department into a metropolitan authority, the newspaper said.

Bondholders are also resisting a plant to raise $9 billion over 40 years through a leasing plan Orr proposed for water department facilities, the News said.

“The bondholders are worried about a repeat of Jefferson County,” said Fabian, referring to Jefferson County, Ala., where bond holders took a haircut on the sewer bonds, accepting 80 cents on the dollar, the newspaper said.

UPI - United Press International, Inc.

Since 1907, United Press International (UPI) has been a leading provider of critical information to media outlets, businesses, governments and researchers worldwide.

Facebook Conversations

Join the Discussion:
View Comments to “Detroit Runs Into Resistant Bondholders”

Comment Policy: We encourage an open discussion with a wide range of viewpoints, even extreme ones, but we will not tolerate racism, profanity or slanderous comments toward the author(s) or comment participants. Make your case passionately, but civilly. Please don't stoop to name calling. We use filters for spam protection. If your comment does not appear, it is likely because it violates the above policy or contains links or language typical of spam. We reserve the right to remove comments at our discretion.

Is there news related to personal liberty happening in your area? Contact us at


Sign Up For Personal Liberty Digest™!

PL Badge

Welcome to,
America's #1 Source for Libertarian News!

To join our group of freedom-loving individuals and to get alerts as well as late-breaking conservative news from Personal Liberty Digest™...

Privacy PolicyYou can opt out at any time. We protect your information like a mother hen. We will not sell or rent your email address to anyone for any reason.