The Detroit Free Press is reporting that the City of Detroit’s bankruptcy lawyers will file their plan to restructure the city’s debt next week. The bankruptcy plan is expected on the heals of what was termed successful bankruptcy mediation.
Detroit’s creditors will be given an opportunity to vote on the plan and any objections will be brought forward by their bankruptcy lawyers.
Bankruptcy lawyers for both the city and its creditors continue to update the bankruptcy court as to the status of the negotiations between the sides.
The city of Detroit plans to file its proposed bankruptcy restructuring plan with the court next week, the city’s top bankruptcy attorney said today.
Jones Day attorney Bruce Bennett told U.S. Bankruptcy Judge Steven Rhodes that the city plans to file its “plan of adjustment” next week.
The city faces a March 1 deadline to file the first version of the plan, which will include details on how the city plans to treat creditors and assets. The plan of adjustment can be altered as the city conducts additional negotiations with its creditors.
Creditors will be given a chance to vote on the plan, and Rhodes must also approve it — a process that could take several months.
A draft version of the plan acquired by the Free Press earlier this month revealed the city plans to offer pensioners more than other unsecured creditors — in part because foundations are pledging nearly $400 million to reduce pension cuts and spin off the Detroit Institute of Arts.
The plan also involves a proposal to lease the city’s water and sewerage department to an independent authority in exchange for $47 million per year over 40 years.
Attorneys for the city and for several bond insurers were in court today to deliver updates on a dispute over how the city plans to treat general obligation bonds.
Detroit Free Press: http://www.freep.com/article/20140210/NEWS01/302100084/
