Settlement Plan Moving Forward Between Syncora, City Of Detroit In Bankruptcy Proceedings
DETROIT (WWJ) - The city of Detroit has ironed out details of a settlement with a major opponent in its bankruptcy case.
Detroit and bond insurer Syncora finished the deal announced last Tuesday to settle over $400 million in claims.
City attorneys say both sides came to terms creating a final agreement Monday morning - reaching a satisfactory conclusion they call complicated and creative. The settlement would extend Syncora's lease on a tunnel between the U.S. and Canada and grant it a long-term lease on a downtown parking garage, among other concessions.
Syncora attorney Stephen Hackney spoke with reporters outside federal court last Wednesday.
"I don't think I can say that either were that Machiavellian, or that smart," Hackney said. "I think we've just been trying to do, basically, is…assert rights and ask for fair treatment."
"And so we've been making arguments across the board and, based on the plan that's been set up, this is commercial resolution that's advantageous to both parties," he said.
Monday, Judge Steven Rhodes refused to extend a timeout in Detroit's bankruptcy trial -- after a deal with Syncora, a major creditor, removed another opponent from the city's plan to exit Chapter 9.
While Syncora is just one of many creditors in the case - it has been among the most vocal in its opposition to the bankruptcy proceedings.
Remaining parties sought a delay in order to prepare expert witnesses, examine the deal and file potential objections.
City attorneys contend that the sooner the city can emerge from the bankruptcy hearings the better for all concerned and the judge appeared to agree.
Detroit is proposing to get rid of $7 billion in debt and plow $1.7 billion into city services over the next decade. Thousands of retirees have backed a plan that would cut their pension by 4.5 percent and eliminate annual cost-of-living raises.
The pension losses could be restored in years ahead if investment returns improve. Syncora, which has a claim for $400 million, now is likely to recover 26 percent, said Steven Schlein, a spokesman for a law firm representing the company.
MORE: Detroit, Key Bankruptcy Plan Opponent Reach Deal
TM and © Copyright 2014 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2014 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.
