CHICAGO — A bond insurer and Detroit's two pension funds are among five appointees to the committee named to represent the interests of unsecured creditors as the city proceeds through Chapter 9 bankruptcy.
The appointments were made in a filing Monday by federal bankruptcy trustee Daniel McDermott. The establishment of the committee — a standard in federal bankruptcy proceedings — comes as city emergency manager Kevyn Orr is crafting a plan of adjustment.
The goal of the committee is to provide unsecured creditors with a stronger single voice in negotiations on the plan that will address how the city proposes resolving what it defines as more than $18 billion of secured and unsecured debt.
Orr faces a March deadline to submit a restructuring plan, but has said he would release the plan in January. It's unclear how federal mediation currently underway between the city and its interest-rate swap counterparties on possible revisions to their proposed settlement might impact the timing.
The members of the unsecured creditors committee include bond insurer Financial Guaranty Insurance Co.; the General Retirement System of the City of Detroit; the Police and Fire Retirement System of the City of Detroit; individual creditor Jessie Payne; and contract administrator the Wilmington Trust Co.
The City has estimated its debt at more than $18 billion including $11.9 billion that it proposes to treat as unsecured. That figure includes $5.7 billion of other post-employment benefits debt, $3.5 billion of unfunded pension obligations, $651 million of general obligation bonds, $1.43 billion of pension obligation certificates, and other liabilities.
The city proposes treating its other $6.4 billion of debt as secured, according to court filings.