DETROIT (AP) — Detroit has reached an "important settlement" with some creditors as it negotiates ways to get rid of billions of dollars of debt, according to court documents filed Monday, though details of the agreement haven't been released.
The disclosure was made in a lawsuit involving the city — which has a $380 million budget deficit and long-term debt of about $17 billion — an insurance company and a bank. The document doesn't reveal any details but says Detroit no longer needs a restraining order in the case, which involves a dispute over taxes and casino revenue.
"The city reached in principle an important settlement with certain of its creditors late Friday afternoon, which we understand will be executed (Monday)," attorney Deborah Kovsky-Apap said in the court filing.
The city is operating under a powerful state-appointed emergency manager, Kevyn Orr, who is trying to fix Detroit's finances without the city going into bankruptcy. When asked Monday for details on the court filing, Orr's spokesman, Bill Nowling, said a statement was in the works.
Detroit stopped making some debt payments in June, as Orr asked creditors to take about 10 cents on the dollar of what was owed. Private negotiations have been ongoing.
Orr, a bankruptcy attorney and turnaround specialist who represented automaker Chrysler LLC during its successful restructuring, is four months into an 18-month assignment as manager. He's in charge of a city that has lost a quarter of its population since 2000.