CHICAGO – Chapter 9 is supposed to make it easier for a struggling municipality to borrow, but the decisions made so far by Detroit’s leaders may have the opposite effect, bankruptcy expert James Spiotto said Friday at the Bond Dealers of America conference here.

Detroit emergency manager Kevyn Orr’s pre-bankruptcy decision to propose a draconian restructuring plan that gives unsecured creditors only pennies on the dollar was part of the “Kabuki theater” that is Chapter 9 -- a lot of sound and fury with uncertain consequences, said Spiotto, an attorney Chapman and Cutler LLP, during a Friday morning talk on the policy implications of Detroit’s bankruptcy.

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