Member of Atlantic City Emergency Management Team Leaving

Attorney Kevyn Orr had been a consultant after leading the Detroit bankruptcy case.

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By Amy S. Rosenberg

Kevyn Orr, the bankruptcy attorney whose Detroit credentials set off alarms on Wall Street when he was appointed by Gov. Christie as part of an Atlantic City emergency management team, is leaving the post, the governor's office said Monday.

Orr's role was described as "counsel" to Kevin Lavin, the full-time emergency manager, whose duties to date have been mostly those of a super-auditor of the city's finances.

Lavin is being paid $135,000 a year; Orr's compensation, billed by the hour, has not been made public. The two were appointed in January. Atlantic City's mayor is paid $105,000 a year.

"From the start, it was made clear that Kevyn Orr would lend his expertise as a short-term consultant to Kevin Lavin, who continues to lead all efforts to review and improve the operations, finances, and culture of Atlantic City's government to bring long-term stability to the resort town," Christie spokesman Brian Murray said in a statement.

He said Orr "will finalize his work by the end of the month, as the emergency management team continues its efforts to stabilize the city's finances." Its next "assessment report" is due in June."

A statement on the website of the Jones Day law firm said Orr would return to the firm beginning May 1 "as a partner in its business restructuring and reorganization practice" and as "partner-in-charge" of its Washington office.

The release spends three paragraphs extolling Orr's work in Detroit but makes no mention of his role in Atlantic City.

Chris Filiciello, chief of staff to Mayor Don Guardian, who had opposed the appointments, said in a statement: "Since Kevin Lavin and Kevyn Orr were appointed in January to work with us in Atlantic City, both have been very professional and shared their expertise in restructuring debt. We wish Mr. Orr the best in his future endeavors. We will continue as we have since day one to work with emergency manager Kevin Lavin on restructuring Atlantic City's debt."

Orr was tapped by Christie executive order in January, after finishing a stint as Detroit's emergency manager, leading the city through a municipal bankruptcy under Michigan law.

Unlike Lavin, Orr was considered a consultant who billed by the hour, but neither his hours or his rate have been released by the governor's office, despite repeated requests. Murray said Monday that he was working on obtaining that information. "That's a popular request," he said.

Orr's involvement with Detroit led Wall Street credit rating firms to almost immediately cut Atlantic City's bond rating out of fear that a bankruptcy could be in the offing, despite assertions from Orr and others that his role should not be interpreted that way. Moody's said the move could signal that New Jersey was changing a long-held policy of not allowing a municipality to go bankrupt.

City Revenue Director Michael Stinson said last week that he believed the city was unlikely to go that route -- though debt restructuring short of bankruptcy seems inevitable -- and would be headed back to the bond market to try to cover a $40 million bridge loan from the state.

The city, which lost four casinos last year and saw its ratable base plummet from $20.5 billion in 2010 to $7.3 billion in 2015, has a $100 million gap in its 2015 budget and is facing layoffs and budget cuts.

Orr appeared at an initial news conference after being appointed by Christie but has mostly stayed out of public view since then. Lavin has been a more regular presence in City Hall and has been overseeing a team of accountants from Ernst & Young. The two held a conference call in March to discuss a 60-day report.

Lavin is reportedly in the process of hiring restructuring attorneys to mediate agreements with Atlantic City's unions and creditors, including the Borgata, which is owed about $130 million in tax appeal settlements. Murray said retired New Jersey bankruptcy Judge Donald Steckroth had been brought on the team. "Naturally, legal counsel with exactly this financial expertise would be engaged as part of the ongoing reform efforts underway in Atlantic City," he said in an e-mail.

Orr did not respond to a request for comment.

(c)2015 The Philadelphia Inquirer

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