A judge has suspended Detroit’s bankruptcy trial until Monday to give the city more time to work out details of a settlement with a major creditor.
The joint filing by the city and bond insurer Syncora Guarantee said that they “have reached an agreement in principle” to settle the company’s $400 million claim in the nation’s largest-ever municipal bankruptcy case.
Detroit’s computer system is “beyond fundamentally broken” and years behind the latest software, the city’s new technology chief told a bankruptcy judge Monday.
An attorney for one of Detroit’s creditors says the company believes the city can afford 75 cents on the dollar to settle its debt.
“All the revenue sources creditors can reach and are permitted to reach are exhausted,” Bennett told Judge Steven Rhodes.
Detroit expects to cut $12 billion in unsecured debt to about $5 billion, which is “more manageable,” according to Bill Nowling, a spokesman for emergency manager Kevyn Orr.
Art finance lender, Capital Art Group of New York offered to loan Detroit $4 billion, if the DIA collection is used as collateral for the loan.
Water department officials say the system worked exactly as it was designed to – the day of torrential rains – which they say just overwhelmed the system.
Syncora Guarantee said in a court filing that the plan put together by state-appointed emergency manager Kevyn Orr and attorneys hired by the city is unfair.
Toyota has pledged $1 million toward the Detroit Institute of Arts’ goal to raise $100 million to prevent the sale of art in Detroit’s bankruptcy and help city pensioners.