DETROIT - Testimony is to resume Monday in the hearings on Detroit's bid to get out of bankruptcy, and the federal judge overseeing the case is expected to rule on a request that he order the city's water department to enact a six-month pause in shutting off service over unpaid bills.
U.S. Bankruptcy Judge Steven Rhodes also is likely to hear updates from city lawyers about the agreement reached last week to keep emergency manager Kevyn Orr on the job until the bankruptcy exit strategy is approved, yet restore power to run city government to Mayor Mike Duggan and the City Council.
During a meeting of the city's financial advisory board on Friday, Orr outlined the arrangement that will keep him in charge of shepherding Detroit through the final stages of its bankruptcy.
Orr will technically remain emergency manager until the plan of adjustment is confirmed, but he relinquished control of city government back to elected officials in a deal announced Thursday. Without the powers of emergency manager, he told the board, it wasn't clear he'd have the authority to conclude bond deals crucial to the city emerging from the largest municipal bankruptcy in U.S. history.
Orr said he expects testimony to last only a couple more weeks.
'Hopefully sometime between the end of the trial and Thanksgiving we'll have a final ruling,' Orr told the board.
Detroit emergency manager Kevyn Orr says 'Detroit continues to make steady progress in returning to firm financial footing and becoming an attractive place to invest once again.'(Photo: Carlos Osorio/Associated Press)
Orr is among the next four witnesses Jones Day lawyers for the city plan to call this week. An amended witness list the city filed last week said that, before Orr appears on the stand - for what's likely to be some of the most critical testimony of the case - the city plans to call:
* Gaurav Malhotra, a managing partner at the accounting firm Ernst & Young's Chicago office, who has been a key financial adviser to the city.
* Ken Buckfire of Miller Buckfire, the investment banker who has been advising Detroit on matters like creation of a regional water authority.
* James Doak, a managing director at Miller Buckfire.
Rhodes said last week, after a day and a half of testimony on the water shutoffs, that he would issue a ruling this morning.
Advocacy groups seeking a moratorium on shutoffs testified last week that the Detroit Water and Sewerage Department's policies of mass shutoffs - 19,000 in recent months - are leaving low-income households with seniors and children without water service.
They asked Rhodes to issue a temporary restraining order to stop the shutoffs until the city can come up with a better way to address the unaffordability of water service in a city where more than half of households live at or below 150% of the federal poverty level.
Also last week, Rhodes agreed to hear an appeal from labor activist Robert Davis. He asked the judge for permission to file a lawsuit in Wayne County Circuit Court on allegations that the Detroit council illegally met in closed session to debate the agreement that keeps Orr on to manage the bankruptcy.
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Posted by Unknown on Monday, September 29, 2014 - Rating: 4.5
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