Detroit To Halt Debt Payments As Part Of Restructuring

Law360, New York (June 14, 2013, 5:26 PM EDT) -- Detroit will stop making payments on some of its staggering $17 billion debt and is asking creditors to swallow huge losses in an effort to restructure the city’s financial system, according to a report from Detroit’s emergency financial manager Kevyn Orr.

The former Jones Day partner said the city is insolvent and cannot afford to make payments on its unsecured debt, including $40 million due Friday on pension-related certificates of participation, making a moratorium on those payments necessary. Bondholders and retirees will likely be forced to...
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