Pledge brings private support for Detroit to $370 million
The court-appointed mediators in the Detroit bankruptcy say they now have $370 million in private support to rescue the city after the Michigan-based W.K. Kellogg Foundation announced a $40 million commitment.
"We see this as an investment in Detroit, its children and families, and our shared future," the 84-year-old foundation said in a statement.
The mediators, led by Chief U.S. District Judge Gerald Rosen, have been working on assembling a package to aid retired city employees—who could face massive pension cuts in the bankruptcy—while protecting the city-owned art collection at the Detroit Institute of Arts.
The private funds are on top of a $350 million package proposed by Michigan Gov. Rick Snyder that still needs legislative approval.
While the mediation team said in a statement that the Kellogg contribution is "remarkably generous," the funding still is nowhere near enough to close an estimated $3.5 billion pension gap.
Kevyn Orr, the emergency manager appointed by Snyder to restructure Detroit's finances, is expected to detail his plans in a matter of weeks.
The Kellogg Foundation, founded by the cereal company of the same name, bills itself as one of the largest philanthropic foundations in the country, with a primary goal of helping impoverished children.
—By CNBC's Scott Cohn. Follow him on Twitter