All of us involved in the Water protests in Detroit can claim a victory, even though the official position is that the result we wanted was going to happen anyway. WXYZ reports Detroit Water and Sewerage Department suspends water shutoffs for 15 days.
Next, the Free Press reports Detroit pensioners back grand bargain in bankruptcy vote, creditors object.
Detroit retirees voted to accept pension cuts and allow the Detroit Institute of Arts to spin off as an independent institution, reflecting a critical endorsement of the city’s restructuring blueprint to resolve the largest municipal bankruptcy in U.S. history.Both of those are good news. I'd be tempted to post Professor Farnsworth except for the following.
With all votes counted, the two separate classes of pensioners — civilians and police and fire — voted “yes” to back the grand bargain, giving the city significant momentum in its fight against holdout financial creditors.
Still, several obstacles linger for the bankruptcy. For one thing, 119 classes of Detroit Water and Sewer Department secured bondholders voted “no,” compared to 32 that voted “yes,” presenting a legal hurdle for the city. They voted “no,” even though they will be paid 100% of their principal, because they are mad at the city’s plan to redeem their bonds early.It comes back to the water and sewer department and its debt, which is why the shutoffs were happening in the first place.
The city is expected to continue negotiations with the water and sewer investors in a bid to reach a settlement that could resolve their differences.
That's not all.
Four groups of unsecured creditors voted “no” — including the stiffest of opponents, a group of bond insurers and hedge funds that control $1.4 billion in pension debt issued by Mayor Kwame Kilpatrick’s administration in 2005. Smaller unsecured creditors, including people who sued the city and are owed settlements, also voted “no.”Stay tuned.
The Chapter 9 bankruptcy will now proceed to its final stage: a massive confirmation trial starting Aug. 14 to decide whether the plan is fair, legal and feasible.