Key 'plan of adjustment' to be filed as Detroit works to rebuild
Detroit Emergency Manager Kevyn Orr plans to file his proposal to reorganize the bankrupt city's finances "in about two weeks," according to a statement from his office.
Ahead of that planned filing, according to the statement, Orr presented the plan to the city's creditors—including its employee unions—on a confidential basis Wednesday. The so-called plan of adjustment is a pivotal step in the largest municipal bankruptcy in U.S. history.
Orr, appointed by Michigan Gov. Rick Snyder last year to manage the beleaguered city, is expected to propose widespread cuts in pensions and other employee benefits in an attempt to close an $18.5 billion funding gap—as much as $3.5 billion of that in pension funds.
"Mr. Orr and his team believe the Plan offers the most effective and efficient way for Detroit to resolve its numerous issues, revitalize itself and continue with its efforts to once again become an attractive place in which to live, work and invest," according to the statement, which does not detail the proposal.
Also Wednesday, the Detroit Institute of Arts announced a $100 million fundraising drive to help preserve the city-owned art collection and shore up the pension plans.
(Read more: Pledge boosts private support for Detroit rescue)
The money is on top of $370 million pledged by private foundations and another $350 million in state funding proposed by Snyder, bringing the total rescue fund, potentially, to $820 million.
—By CNBC's Scott Cohn. Follow him on Twitter