Detroit bankruptcy trial is halted for deal with a holdout creditor
The judge overseeing Detroit’s bankruptcy has adjourned the trial until Monday to allow the parties to finalize a deal with a holdout creditor.
The deal with bond insurer Syncora Guarantee could allow for a quicker resolution of Detroit’s bankruptcy, the New York Times reports. “For months, as the city reached deals with other creditors,” the newspaper says, “Syncora had been the most forceful and public critic, and its legal objections to the city’s plan for eliminating $7 billion in debts threatened to keep Detroit in litigation for months, even years.”
The Detroit News and the Detroit Free Press also have stories.
The deal would extend for 20 years a lease with a Syncora-owned firm that collects vehicle tolls from the Detroit-Windsor tunnel, according to the Detroit News and the Detroit Free Press. Other deal “goodies” include credits toward the purchase of some land and a lease on a parking garage, according to the Detroit Free Press.
The deal is no “slam dunk,” the Detroit Free Press says, because it is contingent on release of bank debt related to a former pension debt deal.
One of Syncora’s lawyers, Stephen Hackney, said outside court that “it feels better to be loving rather than fighting,” according to the Detroit News.
“It is interesting and ironic that we are both part of Detroit’s future,” he said.
Related article:
ABAJournal.com: “Jones Day bill for Detroit bankruptcy has topped $26M”
