CHICAGO — Michigan Gov. Rick Snyder Friday signed a package of bills aimed at helping resolve Detroit's Chapter 9 case at a celebratory ceremony where the governor and others proclaimed the end is in sight for the historic bankruptcy.
The nine-bill package includes a $195 million contribution to Detroit from the state. The contribution is part of a grand bargain putting hundreds of millions of dollars towards the city's pensions while protecting the art collection of the city owned Detroit Institute of Arts museum from privatization or sale.
"This is an important milestone today," Snyder said.
"Bankruptcy is a terribly difficult thing, and people are making real sacrifices," he said. "Let's finish this job, let's resolve this bankruptcy, let's support people who have made sacrifices in this difficult time."
Snyder was joined by dozens of others who have played a prominent role in the case, including Chief Judge Gerald Rosen, who is the chief mediator and crafted the grand bargain, as well as state lawmakers, Detroit emergency manager Kevyn Orr, Detroit Mayor Mike Duggan, and others.
"There are still serious issues, but we're in problem-solving mode, we're in positive mode, we can all focus our energies now on growing and improving the city of Detroit," the governor said.
Snyder urged retirees to vote 'yes' on the city's plan of confirmation, which relies on the grand bargain money. Retirees and creditors have until July 11 to vote. A trial on the confirmation plan is set to begin Aug. 14.
Rosen thanked the foundations for being the first to agree to contribute money for the grand bargain and allowing it to move forward. As he has said in previous speeches, Rosen said he believed they are "setting a template" in Detroit that other distressed or bankrupt cities can use in the future.
Supporters of the "grand bargain" value it at $816 million, a figure that assumes the state's $195 million contribution will grow to $350 million over 20 years through investment returns.
Rosen said the bargain is designed to benefit the retirees. "From the very beginning my mediation team and I have had the retirees foremost in mind," the judge said. He added that the two people who negotiated on behalf of the retirees are the "heroes of the bankruptcy."
Shirley Lightsey, president of the Detroit Retired City Employees Association, also urged retirees to vote in favor of the plan, crafted after a year of "litigation, court hearings, meetings seven days a week, negotiations, and mediation," she said.
"Our reaction [a year ago] was to fight at all cost and even now we are not happy to give up some of our promised benefits and legal rights," Lightsey said. "But you cannot give up a billion dollars," she said. "I now know that the only way to vote is yes."
Bond insurers Syncora Guarantee Inc. and Financial Guaranty Insurance Co., as well as some other financial creditors still fighting the confirmation plan, argue that the grand bargain is illegal because it favors the retirees over other creditor classes.
