Cleveland-based Jones Day, hired to be the city’s restructuring counsel, is regarded as expert in restructuring and insolvency, with and without court supervision, according to James McTevia, president of a Michigan-based firm that specializes in turnaround management.
“I am sure their goal is to keep Detroit out of the bankruptcy court,” he said.
Orr told reporters in Detroit on Thursday that he is up to the challenge.
“We can rise from the ashes,” he said. “This is a beautiful city and a wonderful state that gave me my start. I feel compelled to do this job.”
Under state law, his appointment is to last 18 months. But Orr doesn’t expect the turnaround to take nearly that long.
The job “has a fuse on it,” he said. “And If I do a good job, I get fired. I am highly motivated. If we work together, we can get this done significantly shorter than 18 months.”
When he met with Snyder, Orr said, he called the manager job “an unsung hero task.” He asked the governor why he would bother to help the city. Snyder’s response was: “Kevyn, it’s the right thing to do, and it’s the right time to do it.”
The new manager called the job “the Olympics of restructuring” and said he relished the challenge, even though it meant up giving up his job with the law firm.
“It’s not that I’m altruistic, but if we can do this, I will have participated in one of the greatest turnarounds in the history of this country,” Orr said.
A state-appointed review team previously determined that Detroit’s cash deficit meant the city would have to either increase revenues or cut spending — or both — by about $15 million per month for three months starting in January to “remain financially viable.”
Those troubles, and the struggles of the mayor and the City Council to present a workable turnaround plan, led Snyder to turn to Orr.
“The bottom line here is that we must stop fighting each other,” Bing said Thursday. “We must start to work together. I’m happy that now I’ve got teammates. I’ve got partners that can help me do things that need to be done in our city.”
Orr has practiced law in business restructuring, financial institution regulation and commercial litigation since 1984.