DETROIT (AP) — An attorney for one of Detroit's creditors told a judge overseeing the city's historic bankruptcy Wednesday that Detroit could afford to pay 75 cents on the dollar to settle its debt if it sold some masterpieces from the art museum.
But an attorney for Detroit told federal Judge Steven Rhodes in his opening statement that the debt-restructuring plan focused first on resolving a dire financial situation and does not discriminate against creditors.
Syncora Guarantee attorney Marc Kieselstein said the debt-restructuring plan would pay some creditors less than 10 cents on the dollar. Rhodes asked Kieselstein the percentage he believed Detroit could offer the New York-based bond insurer and where the money would come from.
"There's the art," Kieselstein said, referring to city-owned artwork at the Detroit Institute of Arts. "You could sell one or two pieces. You can finance some of the pieces to get that number."
Detroit wants to cut $12 billion in unsecured debt to about $5 billion through its plan of adjustment, which must be approved by Rhodes. Most creditors, including more than 30,000 retirees and city employees, have endorsed the plan of adjustment.
Syncora, who has said its claims are about $400 million, is not one of those creditors, and has said Detroit's blueprint for emerging from the largest municipal bankruptcy in U.S. history is unfair for financial creditors.
The trial's second day began with attorney Bruce Bennett explaining that the plan, put together by state-appointed emergency manager Kevyn Orr and his restructuring team, has to be followed in order for Detroit to be stronger and viable.
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