ROMULUS, Mich. (AP) — Detroit’s emergency manager says the city is defaulting on about $2.5 billion of debt.
Kevyn Orr said Friday that Detroit is asking creditors to take about 10 cents on the dollar of what they’re owed. Underfunded pension claims will get less.
Orr spent about two hours Friday morning with dozens of people representing banks, insurers and companies holding Detroit debt. He told reporters earlier at an airport hotel in Romulus he wants to fix fiscal problems that have made the city insolvent.
He has instituted a moratorium on all of Detroit’s payments on unsecured debt, seeking forgiveness of millions of dollars owed by the city.
He also said $1.25 billion will be set aside over 10 years for public safety, lighting and neighborhood blight elimination.
Whom ever buys the Los Angeles Dodgers in a bankruptcy court-led sale from Frank McCourt will have a stack of IOUs to deal with.
The baseball team and its related entities now owe $555 million, according to people familiar with the finances.
McCourt securitized a large portion of the team’s ticket revenue in two trusts for which there is $390 million of debt attached. Annual principal and interest payments on the debt is around $32 million a year, meaning in 2010 the team, which gets the ticket revenue after the debt payments, would have received $70 million of the $102 million the Dodgers pulled in from ticket sales. For 2011, as attendance fell 17%, the team would have only received about $50 million.
The Dodgers also have borrowed $55 million from Major League Baseball’s credit facility and have used $80 million of debtor-in-possession financing from the league. On top of that, McCourt borrowed $30 million from Fox so he could meet payroll this past season. And the team is not off the hook from paying into MLB’s revenue-sharing system, which cost the Dodgers over $30 million in 2010.
All of these liabilities make the Dodgers, which forbes valued at $800 million in March, the most indebted team in baseball history.