Judge to rule on Detroit bankruptcy plan in early November

Reuters News
Posted: Oct 20, 2014 10:21 AM

DETROIT (Reuters) - A U.S. judge said on Monday he would rule during the week of Nov. 3 on Detroit's plan to adjust its debts and exit the biggest-ever municipal bankruptcy.

Bankruptcy Judge Steven Rhodes said he would issue an oral ruling in court late that week. He also set Oct. 27 for closing arguments in the plan's confirmation hearing, which began Sept. 2.

The wrap-up of the historic bankruptcy comes after Detroit reached settlements with all of its major creditors, including its two retirement systems and companies that guaranteed payments on the city's bonds.

On Monday, Heather Lennox of Jones Day, a lawyer for Detroit, told Rhodes that two smaller claims with unions representing about 330 public library and six Cobo Hall convention center retirees had been resolved. She added, however, that the court-appointed retirees' committee still had some issues.

Rhodes pounced on the committee's lawyer, Sam Alberts from law firm Dentons.

"Really? Seriously?" Rhodes said. "I don't want an explanation. I want you to resolve it."

The judge on Monday also rejected a claim from the American Federation of State, County and Municipal Employees union, whose members contended they were owed $174 million from pension reforms enacted in 2011.

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The city on Tuesday will present witnesses to testify about a deal struck with bond insurer Financial Guaranty Insurance Co [FGIC.UL] last week, according to Lennox.

On Wednesday, Martha Kopacz, an expert witness tapped by Rhodes to assess the feasibility of Detroit's debt adjustment plan, will testify.

(Reporting By Karen Pierog; Additional reporting by Lisa Lambert in Washington; Editing by Lisa Von Ahn)