The City of Detroit’s creditors have filed papers for bankruptcy Judge Steven Rhodes to reconsider his time line for the City’s bankruptcy.
Detroit’s largest creditors are asking U.S. Bankruptcy Judge Steven Rhodes to reconsider his ambitious and expedited process for determining the city’s eligibility for bankruptcy protection.
In an attempt to speed along the largest municipal bankruptcy filing in U.S. history, Rhodes has fast-tracked the case by setting legal deadlines and hearings on the city’s eligibility while also allowing creditors to challenge a settlement agreement between the city and two banks owed tens of millions for debt financing.
Rhodes may hear those objections today in court, as well as legal arguments from the Attorney General’s Office as to why Gov. Rick Snyder, Treasurer Andy Dillon and other state officials should be shielded from being deposed in the case by attorneys for the United Auto Workers and the American Federation of State, County and Municipal Employees.
In a series of motions filed Friday and Monday, attorneys for the UAW, AFSCME, pension funds, retiree associations, bondholders and insurers raised concerns about time restrictions and the jam-packed scheduled Rhodes has set over the next six weeks.
On Monday, 11 of the 12 parties objecting to Detroit’s proposal to pay UBS and Bank of America 75 cents to 82 cents on the dollar to terminate an interest rate swap agreement filed a unified objection to Rhodes’ plan for a two-day hearing on the proposed settlement. Rhodes has assigned the city’s attorney four hours and all objectors five hours Sept. 23-24 to air their arguments for and against the proposal.
“The objectors are concerned that live witness testimony may take up much of the nine hours of hearing time, leaving insufficient time for argument,” the creditors wrote in Monday’s objection.
The objectors, led by Syncora Guarantee, an insurer of the interest rate swaps and underlining pension bonds, proposed streamlining the court proceedings by eliminating live witness testimony in favor of detailing sworn deposition statements, documented evidence and witness testimony on demand to explain a complicated debt arrangement tied to $1.4 billion in pension debt.
“This will hopefully reserve more time for argument of the numerous objections that have been lodged to (the proposed settlement),” the creditors’ attorneys wrote.
The Detroit News: http://www.detroitnews.com/article/20130910/METRO01/309100029/Slow-pace-Detroit-bankruptcy-eligibility-creditors-ask-judge?odyssey=mod|newswell|text|FRONTPAGE|s
