Bankruptcy expert, Kevyn Orr named Detroit emergency manager

Kevyn Orr. PHOTO/Jones Day/AP

Kevyn Orr, a bankruptcy expert, has been selected by Michigan’s Governor Rick Snyder to take over Detroit as emergency financial manager.

Orr, 54, has wide experience in business restructuring and a reputation as a calm leader who thoughtfully considers a range of views. He was Jones Day’s third most active partner on the Chrysler restructuring, piling up US$1 million in fees in the first year on the case.

On Monday, Detroit Mayor Dave Bing said the city had chosen Jones Day as its restructuring counsel. The Detroit Free Press later reported that Orr was the top candidate for emergency manager.

During a news conference Thursday, Orr called Detroit a “storied American city.” “We can rise from the ashes,” Orr said. “This is a beautiful city and a wonderful state that gave me my start. I feel compelled to do this job.”

One decision that Orr is likely to face is whether to recommend the city file for bankruptcy, which, if allowed by the state, would be the biggest municipal bankruptcy in U.S. history. Detroit, the birthplace of the U.S. auto industry and Motown music, has suffered an exodus since the U.S. housing crisis, leaving it with falling tax revenue and rising crime.
It has “operational dysfunction” in its government, debt of US$14 billion, and a deficit projected to hit more than US$100 million when its fiscal year ends on June 30, according to a report commissioned by the governor.

Kevyn Orr established himself as a restructuring leader during Chrysler’s intense five-week dash to complete its sale to Fiat in 2009, a turnaround that some considered improbable at the time. He logged US$1 million in fees on the Chrysler restructuring in the first year, according to court documents. He billed as much as US$750 an hour, above the average hourly rate of US$690 for a Jones Day partner. Two other partners, John Papadakis and Adam Plainer, billed at more than US$1,000 an hour.

During the initial weeks, Orr appeared regularly in court and examined witnesses as Chrysler battled for approval of its sale to Fiat, a deal backed by U.S. government funding. He briefed reporters during court breaks and patiently walked them through the complex proceedings.

Prior to joining Jones Day, Orr was director of the executive office for the U.S. Trustee, the arm of the Justice Department that oversees bankruptcy. He is originally from Florida, earned his graduate and law degrees at the University of Michigan.