Pledge brings private support for Detroit to $370 million
Published: Tuesday, 28 Jan 2014 | 5:01 PM ET
Scott CohnBy: Scott Cohn | CNBC Senior Correspondent
Michigan Gov. Rick Snyder
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.
(Read more: Detroit aid package to protect pensions gains support)
Michigan proposes bankruptcy settlement
CNBC’s Scott Cohn reports that Gov. Rick Snyder has introduced a $350 settlement designed to pay Michigan retirees who would otherwise face pension cuts.
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.