Insurer Backing Detroit Bonds Opposes City Plans

July 10, 2013

An insurance company that backs more than $170 million in Detroit bonds says it opposes a plan by the city’s state-appointed emergency manager to restructure the city’s finances.

Ambac Assurance Corp. said in a statement issued on July 8 that it disagrees with Kevyn Orr’s plan to treat general obligation bondholders the same as unsecured creditors, calling it “harmful to Detroit and the interests of taxpayers in Michigan.”

Orr’s office disagrees with Ambac’s assessment, saying general obligation bonds are unsecured debt.

Orr stopped paying Detroit’s unsecured creditors in mid-June and seeks to settle their $11.4 billion in claims with about $2 billion. The bankruptcy expert plans to take about 25 bankers on a tour of some of Detroit’s hardest-hit areas to help them understand what is at stake.

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