ROMULUS, Mich. — A team led by a state-appointed emergency manager said Friday that Detroit is defaulting on about $2.5 billion in unsecured debt and is asking creditors to take about 10 cents on the dollar of what the city owes them.
Kevyn Orr spent two hours with about 180 bond insurers, pension trustees, union representatives, and other creditors in a move to avoid what bankruptcy experts have said would be the largest municipal bankruptcy in US history.
Underfunded pension claims probably would get less than the 10 cents on the dollar.
An assessment of the plan’s progress will come in the next 30 days or so. Orr also announced that Detroit stopped paying on its unsecured debt Friday to ‘‘conserve cash’’ for police, fire, and other services in the city of 700,000 people. The debt not being paid includes $39 million owed to a certificate of participation.
Orr’s team said the proposal is the one shot to permanently fix fiscal problems that have made the city insolvent.