Wednesday, July 24, 2013

Activist: Emails show Orr, firm planned bankruptcy from start From The Detroit

Detroit— Emergency Manager Kevyn Orr and members of his former law firm discussed the potential of Orr taking the job and filing a Detroit bankruptcy weeks before he was formally appointed, emails obtained through a court order show.
Union activist Robert Davis distributed a snippet of the January and February correspondence between the Jones Day firm, Orr and an aide from Gov. Rick Snyder’s office during a press conference Monday at the AFSCME hall in downtown Detroit. Snyder appointed Orr as emergency manager in March.
“It’s an outright slap in the face to the citizens in the city of Detroit,” Davis said of the emails. “It clearly indicates from Day One ... the decision (to seek bankruptcy) was already made.”
The emails are the latest batch released by Davis who obtained them through a lawsuit seeking to nullify Orr’s appointment. An Ingham County Circuit Court judge is expected to rule Wednesday on whether the case will go to trial, he said.
Orr spokesman Bill Nowling called Davis’ allegations “baseless,” noting the emails show nothing more than proper due diligence.
“The notion that a Chapter 9 filing was a foregone conclusion is absurd,” Nowling said in a released statement. “Kevyn Orr held more than 100 meetings with creditors, stakeholders and unions in the last three months before deciding that the best course for restructuring the city was to seek federal bankruptcy protection.”
In one Jan. 31 email, a Jones Day attorney, Daniel Moss, tells Orr that the “ideal scenario” for Detroit would be for Snyder and Detroit Mayor Dave Bing to agree “that the best option is simply to go through an orderly Chapter 9.”
“This avoids an unnecessary political fight over the scope/authority of any appointed emergency manager ... and, moreover, moves the ball forward on setting Detroit on the right track,” Moss wrote on Jan. 31.
The emails also include a summary sent to Orr from Snyder aide Richard Baird, detailing a “partnership” prepared by Bing, pledging cooperation and urging others to be part of the solution.
Bing, in a statement released Monday, said he’s been “very vocal about being against an emergency manager.”
“I did not cut any type of secret deal with Lansing,” Bing said. “When it became obvious that Lansing had made the decision to bring in an emergency manager, I thought the best choice was for the city to work in partnership with Lansing to protect the interests of the citizens of Detroit.”
To underscore his point that the draft agreement reference was not formal, Bing also noted in his statement that the state had not kept his executive team intact, did not support maintaining federal funding for DDOT and that no lease deal had been arranged for Belle Isle, as outlined in the emails.
Sara Wurfel, a spokeswoman for Snyder, said Snyder has been “transparent and visible” in reaching and sharing his decisions.
“That record speaks for itself. And all laws have been closely followed,” she said in an email. “Gov. Snyder acted to do everything possible to avoid the need for an emergency manager for the city of Detroit in the first place, and then to avoid the need for a bankruptcy filing.”Davis is under federal indictment in a separate matter for allegedly stealing $125,000 from Highland Park schools.

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