Detroit Bankruptcy Decision Set For Early November
DETROIT (AP/WWJ) - A judge promised a swift decision Monday on Detroit's plan to get out of bankruptcy, signaling the largest public bankruptcy in U.S. history could close in just a few more weeks.
Judge Steven Rhodes said he'll start hearing final arguments on Oct. 27 and announce whether Detroit's plan is fair and feasible no later than Nov. 7. He disclosed the timetable during a brief hearing.
If that schedule sticks, Detroit's bankruptcy could end less than 18 months after it began. Major creditors opposing the reorganization have been reaching deals since a trial started in September, settlements that make Rhodes' job much easier as he decides whether to approve the plan.
"Specifically, the judge will rule whether the city was fair to all creditors," said WWJ Legal Analyst Charlie Langton, "and since most have settled, that issue should be an easy decision."
"Secondly, the judge will decide is the city's plan to exit bankruptcy is enough to prevent the city from going back into bankruptcy," Langton said.
Bond insurers, which pressed hard for the sale of city-owned art to raise money, have dropped their challenges in exchange for cash, valuable real estate and long-term leases on parking garages and a tunnel connecting Detroit and Canada.
Thousands of retirees agreed to a 4.5 percent pension cut after the state of Michigan, foundations and philanthropists came up with an $816 million bailout to prevent the sale of art and avert even deeper pension reductions.
If Rhodes agrees, Detroit is promising to spend more than $1 billion to improve quality-of-life services in a city that has lost 27 percent of its population since 2000.
The judge still needs to hear from Marti Kopacz, a Boston-based financial expert whom he hired to look at Detroit's plan. She will testify this week.
MORE: WWJ Special: Charlie Langton Talks Detroit Post-Bankruptcy
Detroit Bankruptcy: Continuing Coverage
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 This material may not be published, broadcast, rewritten, or redistributed.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.
