A panel convened by a federal court to represent the interests of retirees in Detroit’s bankruptcy says it has reached a deal with the city.
Reuters reports the deal would cap retirees’ pension losses and call for more contributions to their health benefits.
The Detroit Free Press reports that while the deal still has to be approved by individual retirees, it marks an important step in the resolution of the largest municipal bankruptcy in U.S. history.
If approved it would mean the retirees are “supporting Emergency Manager Kevyn Orr’s restructuring plan to pull the city out of bankruptcy.”
“The agreement, subject to documentation, would permit the committee to support Detroit’s plan to adjust $18 billion of debt and exit the [bankruptcy], according to a statement issued by Dentons, the committee’s law firm.
“‘The deal, which includes significant protections and potential enhancements for retirees under the city’s plan, a cap on maximum pension losses to individual retirees and significantly greater funding for retiree healthcare benefits, reflects the significant efforts of the nine-member committee and its professionals,’ the statement said.”
Earlier this month, Detroit reached another deal that led to losses for unlimited-tax general obligation bondholders, which had the strongest legal position in this matter.