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The trial for Detroit’s bankruptcy exit plan resumed with opening arguments. This is just the beginning of what could be a seven-week hearing regarding what city lawyers see for the future of the city.

Opening Arguments

Oakland County’s lawyer, Jaye Quadrozzi, will kick off the opening arguments. Quadrozzi has attacked the city’s plans regarding the Detroit Water and Sewerage Department. Lawyers representing the United Auto Workers, Wayne County and Detroit’s largest municipal union, the American Federation of State, County and Municipal Employees, also are expected to present their arguments.

Lawyers also spoke of the city’s plan of adjustment, deeming it illegal, unfair, and dead on arrival. Creditor lawyers have been highly critical of the city’s bankruptcy grand bargain, as it eases pension cuts by roughly $816 million as well as protects the Detroit Institute of Arts from having to sell its masterpieces.

First Witness

The city plans to call John Hill as it’s first witness. He is the city’s chief financial officer, a municipal finance expert, and former CEO of Washington, D.C.’s Federal City Council. He played a key role during the restructuring of D.C.’s government operations, acting as the executive of the D.C. Financial Control Board. This Financial Control Board was installed by the federal government in 1995-2001 while the district faced a deficit of more than $700 million.

Grand Bargain

Bruce Bennett, Detroit’s top bankruptcy lawyer, feels the grand bargain is the best option for Detroit’s exit plan. Bennet feels it’s a means for the city to emerge from bankruptcy with $7 billion less in debt and liabilities, and that this would allow the city to invest $1.4 billion towards improving crucial city services, such as public safety, better bus systems, and blight removal.

Detroit filed for bankruptcy protection July 18, 2013.

Source: USA Today, Detroit to call first witness in bankruptcy trial, September 4, 2014

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