DETROIT (AP) — The deadline passed Friday for thousands of
creditors to vote on Detroit emergency manager Kevyn Orr’s bankruptcy
restructuring plan for the city.
Ballots had to be received no
later than 5 p.m. EDT by a consulting company in California to be
counted in the largest municipal bankruptcy in U.S. history.
Creditors
voted on proposals to resolve the debt they are owed. The bankruptcy
court has set July 21 as the date for it to receive the voting results.
"As
voting has come to a close on the Plan of Adjustment, the city will now
tabulate and check the results," Orr spokesman Bill Nowling told The
Associated Press in an email just after Friday’s deadline.
The
city’s vote administrator then will prepare an affidavit for the
bankruptcy court "attesting to the voting results by creditor classes,"
Nowling said.
About 32,000 retirees, current and former city
workers were asked to vote on a proposal to cut pensions for
non-uniformed retirees by 4.5 percent and erase cost-of-living
allowances. The proposal also eliminates some cost-of-living payments
for retired police and firefighters.
More "no" than "yes" votes could result in deeper pension cuts.
The city’s bankruptcy trial starts next month.
Without
a confirmation of Orr’s plan — or other plans down the road — the
city’s bankruptcy could be dismissed, said Michael Sweet, a bankruptcy
attorney with Fox-Rothschild’s San Francisco office.
"The
alternative would be very bad," he said. "Without a plan there would
then be a race to the courthouse by creditors" filing lawsuits to get
the money they’re owed.
Orr filed for bankruptcy a year ago,
saying Detroit’s debt was about $18 billion. About $3.5 billion was
listed as unfunded pension liabilities.
Last month, the city’s
General Retirement System and Police and Firefighters Retirement System
recommended their members vote "yes" on Orr’s proposal for them.
Sweet said Orr’s team has been working hard on deals it can get approved.
"They are trying to make something that really works," he said.