Breaking News Emails
Lawyers for Detroit began their attempt on Tuesday to convince a federal judge at the city's bankruptcy trial that its plans to wipe out billions of dollars in debt should be approved. The start of the trial in U.S. District Court comes just over 13 months after Detroit became the largest U.S. city to file for bankruptcy. Attorney Bruce Bennett, one of the city's lawyers, began opening statements Tuesday afternoon before Judge Steven Rhodes, saying progress "has been made, but the city is still in distress." Detroit expects to cut $12 billion in unsecured debt to about $5 billion, which is "more manageable," according to Bill Nowling, a spokesman for emergency manager Kevyn Orr. Most creditors, including more than 30,000 retirees and city employees, have endorsed the plan of adjustment put together by Orr and his restructuring team. One of the keys is a commitment from the state, corporations and foundations to donate $800 million to soften cuts to city pensions. In return, city artwork would be protected from being sold. Bond insurer Syncora Guarantee opposes the plan and says Detroit has unfairly discriminated against financial creditors.