DETROIT, Jan. 8 (UPI) -- Detroit's creditors have plenty of fight left in them to resist cuts in their investment returns, key observers of the city's bankruptcy negotiations said.
"I would think 'some' pushback is wildly understating the pushback," said Matt Fabian, the managing director of Municipal Market Advisors, a bond market research service.
The city is trying to restructure $18 billion in debts.
The Detroit News reported Wednesday that bondholders have been negotiating with Detroit officials in New York City, attempting to reach a consensus before the start of the Detroit International Auto Show, which opens on Monday.
Court appointed mediators are pushing for a deal, but creditor resistance remains strong, several key observers said.
"There's no doubt that people would like to get the plan moving, but it's not going to be settled that fast. There's a lot of fight left to be had on this," said Bill Brandt, a government restructuring consultant from Chicago.
A spokesman for Detroit's emergency financial manager Kevyn Orr said there was still strong resistance to a haircut, the term used to describe losses creditors sometimes take in bankruptcy settlements.
"The bondholders are going to fight hard to make sure that they maintain their rights and they don't lose anything in this. You've got three-dimensional chess going on. They've made it pretty clear they're going to fight any efforts that would make them take less," said the spokesman Bill Nowling.
One one front, issuers of $6 billion in water and sewer bonds are resisting a plan to turn the city's Water and Sewerage Department into a metropolitan authority, the newspaper said.
Bondholders are also resisting a plant to raise $9 billion over 40 years through a leasing plan Orr proposed for water department facilities, the News said.
"The bondholders are worried about a repeat of Jefferson County," said Fabian, referring to Jefferson County, Ala., where bond holders took a haircut on the sewer bonds, accepting 80 cents on the dollar, the newspaper said.