July 25 (Reuters) – Detroit released a revised debt
adjustment plan on Friday that details the role of a
post-bankruptcy monitor and sets up a reserve fund to possibly
enhance recoveries for certain creditors.
The fifth revision of the plan filed in U.S. Bankruptcy
Court creates a litigation trust related to Detroit’s lawsuit
seeking to void $1.45 billion of pension certificates of
participation (COPs) sold in 2005 and 2006.
July 25 (Reuters) – Detroit could be on the fast track to
complete the final, crucial phase of its historic bankruptcy
case, as settlements with key creditors line up and city workers
and retirees demonstrate overwhelming support for cost-saving
retirement benefit changes.
While a small, hard-core group of creditors continues to
hold out for a better deal, the support among workers and
retirees may help push through the city’s plan to adjust $18
billion of debt and exit the biggest Chapter 9 municipal
bankruptcy in U.S. history. It has moved the possibility of a
“cram down,” where a bankruptcy plan is imposed on objecting
creditors, to center stage.
(Reuters) – Detroit’s city workers and retirees overwhelmingly agreed to accept the city’s debt adjustment plan, according to results filed late Monday, potentially clearing the way for the struggling city to exit bankruptcy in the next few months.
Documents filed in U.S. Bankruptcy Court show the city’s current and retired police and fire employees, along with other active and retired city workers, will accept pension reductions to help adjust $18 billion in debt in the largest-ever U.S. municipal bankruptcy case. Most bondholders rejected the plan, along with insurers backing some of the debt.
July 21 (Reuters) – Detroit’s plan to adjust $18 billion of
debt and exit the biggest municipal bankruptcy in U.S. history
is feasible, according to an expert witness report that also
expressed concern that the costs of its rapid restructuring may
hurt the city’s ability to fix its “broken operations.”
Martha Kopacz, a senior managing director at Phoenix
Management Services in Boston, who was chosen by U.S. Bankruptcy
Judge Steven Rhodes in April as an expert witness in the case,
concluded in her July 18 report obtained by Reuters on Monday
that the plan’s revenue, expense and payment assumptions are
By Karen Pierog
(Reuters) – The Detroit Institute of Arts collection may be worth as much as $4.6 billion, but a sale of art works would raise less than $2 billion to pay the bankrupt city’s creditors, according to a report released on Wednesday.
Michael Plummer, an art expert hired by the institute and the city to evaluate the collection and ways to raise cash from it, concluded that litigation and market conditions would depress prices. Liquidating the most valuable works would eventually force the museum to close, in his opinion.
June 26 (Reuters) – Bond insurer Syncora Guarantee Inc has
emerged as Detroit’s chief nemesis in the city’s historic
bankruptcy case and is fighting as if its financial life depends
on a decent recovery on its $400 million exposure to the city.
Since Detroit filed the biggest municipal bankruptcy in U.S.
history last July, Syncora has objected to the city’s moves
nearly every step of the way – from an early agreement with
investment banks over interest rate swaps to the more recent
“grand bargain” designed to save the Detroit Institute of Arts.
WASHINGTON/CHICAGO (Reuters) – New Jersey, which revealed a massive budget shortfall this week, is far from alone in feeling the pinch of lower income tax revenues in the key month of April, a Reuters analysis shows.
Personal income tax collections plunged last month from a year earlier in 27 of 32 states for which Reuters was able to collect data. That’s most of the 43 states that levy income taxes, and drops were as high as 50 percent.
CHICAGO (Reuters) – An Illinois judge on Wednesday suspended the state’s new pension reform law until lawsuits brought by unions, retirees and others challenging the constitutionality of the overhaul of the retirement system are resolved.
“This law is going no place until there is a final resolution on the merits (of the lawsuits),” said Don Craven, an attorney who filed a lawsuit against the law on behalf of the Illinois State Employees Association Retirees.
WASHINGTON/CHICAGO (Reuters) – A top U.S. Federal Reserve official on Thursday called on regulators to revamp a variety of new bank rules, including the way capital minimums are set for big firms and exempting mid-sized banks from some rules.
Fed Governor Daniel Tarullo, the Fed’s point person on financial regulation, said a “rationalization” of some rules would reduce costs for banks but still achieve the goals of the 2010 Dodd-Frank Wall Street oversight law.
By Karen Pierog
(Reuters) – A committee created by a U.S. bankruptcy court to represent Detroit’s retired workers said on Friday it reached an agreement in principle with the city over pensions and healthcare.
The agreement, subject to documentation, would permit the committee to support Detroit’s plan to adjust $18 billion of debt and exit the biggest municipal bankruptcy in U.S. history, according to a statement issued by Dentons, the committee’s law firm.