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We are tapped out that is the word for Detroit's emergency manager today he's unveiled a brutal with structuring plan to save the city.
With Detroit already defaulting on some of the status short time ago it -- last ditch effort.
To stop the biggest municipal bankruptcy in US history but -- -- enough to save detract from the abyss starting announced former mayor just right.
Dennis Archer mayor thank you so much for coming back to the show.
Melissa thanks for them I gotta tell you I was I'm looking through this proposal.
And what -- data he is the fact that bondholders.
Are taking a massive haircut I mean they are getting barely debt ten cents on the dollar.
But at that same time you look at what city employee pension and retiree health care benefits.
Are going down only by ten cents on the dollar.
This does not seem like it is an equitable deal what's your take.
The -- if you take a look at the programs and what has been proposed in its entirety.
It is a haircut -- everybody.
But not -- not the same light their severity somewhat get a buzz cut and someone getting a tram.
Well if you went to public meeting was that where the emergency financial manager this past Monday.
And laid out any proposal including the graphs and charts to show exactly.
-- the city was how much money hand how much it did not have.
You would then begin to listen to what the audience had to say in -- very respectful manner when asking him questions mainly.
That from -- point of view.
The city is in trouble because the banks' positions in what they did doing.
That caused the mortgage debacle that cost so many so much of our income.
That would come to the city of Detroit.
That would be there as a result of property taxes.
That the banks ought to -- -- ought to take more but the reality of it is is that everybody has got to share this let me -- -- what you -- -- There's are are not banks I mean those are those that's everybody I mean that those are pension funds -- your mom and pop will be another.
That's not a -- Saying it Melissa one other thing that I would make an observation on -- and that is.
That it is the insurance companies who ensured a number of the bonds that -- issued.
That are also going to be involved and the reason why.
The city purchased insurance was to ensure that bondholders would be made -- or -- as whole as possible so everybody's.
The money you can't I I agree with you I I think that there's a huge problem -- they listening definitely yeah.
The problem but you talk about the insurance you know those who are -- they municipal bond holders the only way that that that is going to pay play out.
Is -- they defaults on those bonds.
And they're not tied up defaulting they're talking about taking a major haircuts and just paying on that 10%.
So that insurance doesn't -- and.
What we're trying to do what not we know what the emergency financial manager is trying to do is to avoid bankruptcy.
I hope he's successful -- today -- think he believes if he's.
Chance of not going into bankruptcy but it all depends upon what everybody does including our employees the unions and all of the credit.
You know for example on April 26 of this year we had 64.
Million dollars in cash but we head debts of a money that we need to pay now we have in 26 million there.
This is what the emergency financial manager has found and so he's got to be able to put the city in -- position.
At the end of the resolution however it's dealt with whether.
He can cause a settlement or compromise to be -- with or any alternative to bankruptcy.
The city has got to be in a position where can grow attract new business and become -- They -- believe I knew I couldn't agree with you more you are absolutely right I just think that the -- got to go even deeper for that Freddie employees and for the retirees the pensions -- -- like -- like -- that.
-- -- this is so enormous.
If you listen -- -- today Melissa.
If you if you we -- have McNeill yeah O'Neal who is the they represented union representative.
Asked me he said from their perspective.
The union members have been taking any haircut -- level.
Sniper shootings I'm sure the idea that we've certainly got to go we we really appreciate your time and have it come back as I know that this isn't resolved that we're -- If you are planning a comeback -- will be a success story for the city Detroit my money itself I -- so thank you so much.
-- thanks for coming on our right.
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