CHICAGO — Detroit emergency manager Kevyn Orr puts the odds of the city declaring bankruptcy at an even 50-50.

"In the next six weeks we will find out if we have true partners for peace or if we have to take another route," Orr said Monday night during a packed public hearing at Wayne State University. "I've got a job to do and I will use all tools available to me to get the job done."

Responding to a Detroit resident who said it seemed like Orr was using bankruptcy as a threat, Orr said he sees it as a positive thing. "I'm comfortable in that environment," said Orr, who was a bankruptcy attorney at Jones Day before taking the job as Detroit emergency manager in late March.

Orr said he has met with representatives from all 48 of the city's unions. His first meeting with the city's creditors, including bondholders, insurers, and banks, is set for Friday at the Westin Hotel at the Detroit Metro Airport. He will present them with a restructuring proposal. One local report said he will offer 10 cents on the dollar, though a spokesman refused to provide specifics. Orr's office will release the plan later Friday.

The hearing was the first chance for the public to address Orr since Gov. Rick Snyder appointed him emergency manager in late March. Orr provided an overview of a 45-page report he released May 13 outlining the city's fiscal position. The hearing is required under the state's emergency management law, Public Act 436.

"I have a very powerful statute," Orr said, referring to PA 436. "I have an even more powerful Chapter 9. I don't want to use it but I'm going to accomplish this job one way or another."

Orr said public safety and reinvestment in the city are his top priorities. He called the city "technically insolvent," and said it would take 68 years to pay off its debt.

Orr also said that he is considering leasing Belle Isle, the city's treasured park that the City Council earlier this year refused to lease to the state.

Orr said the city's problems have been years in the making, driven largely by annual borrowing that masked a structural deficit. "We have to break the addiction to debt," he said. "Because that's what we've been doing for a long time," Orr said. "It's going to be a tough road but together we can do it."

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.