Manager Orr on stand in Detroit bankruptcy trial

Staff Writer
Columbus CEO

DETROIT (AP) — Emergency manager Kevyn Orr testified in bankruptcy court Wednesday that when he took over Detroit's finances, he found a city with poor services for residents, next to no cash flow and significant neighborhood blight.

Orr, who was hired by the state in March 2013 to fix Detroit's finances and who took the city into the largest municipal bankruptcy in U.S. history, was called to the stand and questioned by city lawyers in federal court in Detroit.

Judge Steven Rhodes is to decide whether Orr's plan to remove $7 billion in debt is fair to creditors. Orr has said Detroit's unsecured debt is about $12 billion.

Before he filed for bankruptcy, Orr said of creditors: "Everybody wanted to get paid in full. Each of the groups had a view that their situation was special ... and did not want to take a haircut."

At the same time, the city was struggling, he testified.

Police and ambulance response times were slow, he said. Most fire runs were to abandoned houses and buildings. Communications and computer systems were antiquated.

"A lot of things surprised me," Orr said. "The simple things ... sending an email ... took an excessive amount of time."

Orr's debt restructuring plan, in which deals have already been reached with most creditors, sets aside $1.7 billion for improving city services. A centerpiece is an agreement where businesses, foundations and the state will donate more than $800 million to soften cuts to retiree pensions. The so-called "Grand Bargain" also would keep city-owned art from being sold to satisfy some debt.

Orr said last week that the trial could end before the end of October.