Detroit has dropped the idea of having a court-appointed monitor keep an eye on its finances when it exits bankruptcy after determining the move was not needed, a city spokesman said today.
The city scratched references to a monitor in a filing in U.S. Bankruptcy Court late Tuesday, just days after it submitted a revised bankruptcy plan that called for creating the watchdog role.
“After discussing it with the mayor and with the state of Michigan, the emergency manager determined such a monitor would be superfluous to the financial oversight and reporting requirements already required as part of the ‘grand bargain' legislation that was signed into law,” said Bill Nowling, spokesman for Detroit Emergency Manager Kevyn Orr.
To ease pension cuts for city retirees and protect the city's art collection, Detroit has garnered money from the state and $466 million in pledges from private groups and the Detroit Institute of Arts in what is called the grand bargain. The state passed a law earlier this summer authorizing a $195 million allocation for the bargain and creating a nine-member financial oversight panel for the post-bankruptcy city.
In the revised plan for dealing with its $18 billion in debt filed last Friday, Detroit added the individual monitor on top of the commission, suggesting the person file quarterly reports on how the city was meeting its obligations and carrying out the grand bargain. On Tuesday, Detroit posted a corrected version of the plan that scratched all references to the monitor.
Nowling added that the monitor idea had been floated before the state authorized the oversight panel.
U.S. Bankruptcy Judge Steven Rhodes will begin a key hearing on the feasibility and fairness of the plan, which was recently approved by most of Detroit's creditors, on Aug. 21. (Reporting by Lisa Lambert in Washington and Karen Pierog in Chicago; Editing by James Dalgleish)
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