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Detroit Bankruptcy Judge Says Court Filing Went Too Far

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Federal Court In Detroit (Photo by Bill Pugliano/Getty Images)

Federal Court In Detroit (Photo by Bill Pugliano/Getty Images)

DETROIT (AP) — The judge overseeing Detroit’s bankruptcy says a creditor’s severe criticism of mediators in the case is “scandalous and defamatory.”

Judge Steven Rhodes said Thursday he’s striking portions of a court filing by Syncora, a bond insurer that could lose millions of dollars in a trial that starts next week.

Syncora’s objection to Detroit’s plan to get out of bankruptcy questions the motives of mediators Gerald Rosen and Eugene Driker in shaping an $816 million pension bailout that also prevents the sale of art. The deal involves foundations and the state of Michigan.

Syncora accused Rosen, who’s a federal judge, and Driker, an attorney, of “naked favoritism” toward Detroit’s retirees at the expense of other creditors.

Rhodes will consider sanctions against Syncora. He says the mediators and Driker’s wife deserve apologies.

 

(Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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