The bankruptcy court may enter a plan end date for the Detroit Bankruptcy. Bankruptcy attorneys for Detroit and its creditors bankruptcy attorneys will attend a hearing today to update the court regarding their current negotiations and resolution of outstanding issues to the bankruptcy.
If all reports back to the court signal that the bankruptcy lawyers have the case on fast track to resolving all issues, the bankruptcy court may well enter a final date for the case to be concluded.
Bankruptcy lawyers for both sides understand the importance of getting Detroit out of bankruptcy as soon as possible.
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U.S. Bankruptcy Judge Steven Rhodes may set a date today for Detroit’s official emergence from Chapter 9 bankruptcy, clearing the way for the city to slash more than $7 billion in debt and reinvest $1.4 billion in services over 10 years.
Rhodes, who approved the city’s plan of adjustment Nov. 7, will get an update on the city’s efforts to complete its restructuring plan at a 10 a.m. hearing. The city is expected to exit bankruptcy by mid-December at the latest.
“I just want this to be done as quickly as possible because it has economic consequences if we don’t do it” expeditiously, Alfredo Perez, an attorney for bond insurer Financial Guaranty Insurance Co., said at a recent hearing.
The judge is also set to reconsider whether to force the city’s two pension funds to submit their bankruptcy expenses for review by the fee examiner appointed to monitor bills during the case.
The Detroit Retirement Systems were not previously subject to the fee-review process because they are legally independent from the city. Two weeks ago, Rhodes concluded that they should be subject to fee examiner Robert Fishman’s review process because the city may ultimately reimburse the pension funds for some of their expenses.
“You’re in,” Rhodes told Robert Gordon, the pension funds’ lead attorney, on Nov. 10. But Rhodes appears to be reconsidering his decision after the pension funds and their financial adviser, Greenhill, filed official objections.
The pension funds acknowledged that if the city must reimburse them for any of their expenses during the case — which has not been determined — they will submit to the fee-review process for that particular purpose. But they don’t believe their overall fees should be subject to the review process.
Fees accumulated by the city’s lawyers, financial advisers and restructuring consultants, as well as the fees accumulated by the Official Committee of Retirees, have already topped $140 million. Those fees are subject to potential reductions following confidential mediation talks set to begin Dec. 3.
Detroit Free Press: http://www.freep.com/story/news/local/detroit-bankruptcy/2014/11/24/judge-steven-rhodes-detroit-bankruptcy-effective-date-pension-funds-retirement-systems/19453283/
