On Monday, Detroit's emergency manager testified that he had thought he had as late as June to avoid a bankruptcy filing, although he knew time was running out for the city and its creditors to agree to concessions.
Testifying in a trial to determine whether Detroit is eligible for Chapter 9 protection, emergency manager Kevyn Orr said he received some counterproposals from creditors after laying out the city's position in mid-June, but none from unions or retirees before filing for bankruptcy protection on July 18.
"Anyone paying attention knew the time had come to make some very difficult decisions," Orr said of a June meeting with hundreds of the city's creditors, according to the Associated Press. "We were in a financial emergency and were going to have to move very quickly."
Detroit must show it is broke and tried in good faith to negotiate with creditors. Attorneys who oppose the filing seeking the largest municipal bankruptcy protection in U.S. history have tried to build a case that bankruptcy was a predetermined course or inevitable outcome.
Orr said he sought authorization from Gov. Rick Snyder on July 16 to file for bankruptcy amid a "mounting level of conflict" that included several lawsuits filed against him and the state as well as a lack of "any real counterproposals."
"The situation seemed to be growing more and more precarious and somewhat out of control," Orr said. "It was clear to me that there was going to be no other way (for an) orderly resolution of the city's problems."
Shortly after 1 p.m. on Monday, Gov. Rick Snyder also took the stand confessing that he did know Detroit retirees weren't being protected by any federal programs when he authorized the city's bankruptcy filing, reports CBS Detroit.
The Republican also testified that he hasn't discussed with Orr the impact a bankruptcy would have on retirees.
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