ELB Approves Detroit Financing Proposals, Land Transfer

Contact: Terry Stanton, Subscribe to Treasury Press Releases 517-335-2167
Agency: Treasury

Proceeds to provide for payment of settlements and claims and assist with exit from bankruptcy

September 26, 2014

The Local Emergency Financial Assistance Loan Board (ELB) today approved a series of financing proposals submitted by Detroit Emergency Manager Kevyn Orr and previously approved by City Council. Proceeds from the transactions will assist the city in addressing several settlements and claims against the city, as it nears the end of its bankruptcy process.

The ELB also approved a proposal from Detroit Emergency Manager Kevyn Orr, to transfer 301 city-owned properties to the Michigan Land Bank Fast Track Authority (MLB). All properties are within the footprint of the New International Trade Crossing (NITC). The transfer will generate proceeds of approximately $1.4 million for the city, funded entirely by the Government of Canada.

The financings approved today were before the ELB, pursuant to the Home Rule City Act (PA 279 of 1909), which requires financial recovery bond transactions to be approved by the three-member panel. The transactions will allow the city to:

  • Settle claims of major insurers and bondholders of unsecured LTGO bonds
  • Fund three other categories of other unsecured claims
  • Pay unsecured claims of Certificates of Participation (COP) Holders and Insurers who agree to settle all claims in the bankruptcy case
  • Effectuate several transactions related to the bankruptcy exit financing

The Local Emergency Financial Assistance Loan Board consists of the State Treasurer, the director of the Department of Technology, Management, and Budget, and the director of the Department of Licensing and Regulatory Affairs (or their respective designees).  

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