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
WASHINGTON, July 11 (Reuters) – Prices on Puerto Rico debt
drifted higher on Friday and trading of the junk-rated bonds
slowed, calming some of the recent market turbulence inspired by
the island’s troubled power authority.
Late on Thursday the cash-strapped utility, the Puerto Rico
Electric Power Authority (PREPA), disclosed it had used about
$41.6 million from its reserves to make a July 1 bond payment of
$471.56 million. The filing was a worrying indication of the
independent agency’s financial deterioration to investors who
believe PREPA will soon default or restructure its debt.
WASHINGTON, July 1 (Reuters) – Moody’s pushed its rating on
Puerto Rico’s debt deeper into junk territory on Tuesday and
prices of the island’s troubled electric authority’s bonds
plunged as investors awaited word on whether they would receive
a scheduled payment on the securities.
The ratings cut and the fall in Puerto Rico Electric Power
Authority, or PREPA, bonds comes just days after the territory
cut assistance to its public corporations and created a
bankruptcy-like process for restructuring their debts.
(Reuters) – Puerto Rico’s troubles continued to worsen on Monday after mutual funds holding about $1.7 billion in its debt sued the commonwealth while other investors sold the bonds on concerns the island’s finances could deteriorate further.
The flashpoint for the lawsuit brought by two large institutional holders is a law passed last week that allows Puerto Rico’s public corporations – primarily its troubled electric power authority known as PREPA – to restructure their debt. It sparked a sharp selloff in these agency bonds that extended on Monday.
WASHINGTON, June 24 (Reuters) – The Securities and Exchange
Commission is seeking an emergency restraining order to prevent
a Chicago suburb from selling bonds this month, alleging in
court documents filed on Tuesday that the city and its
comptroller misused bond proceeds and schemed to defraud
In a complaint filed against the town of Harvey, Illinois,
and the comptroller, Joseph Letke, in the U.S. District Court
for the Northern District of Illinois, the SEC also demanded a
jury trial – an unusual request in the SEC’s current crackdown
on the $3.7 trillion municipal bond market.
WASHINGTON (Reuters) – The top U.S. securities regulator on Friday set her sights on the less transparent multi-trillion dollar bond market, saying new reforms are needed to foster competition and reduce costs for investors.
“Trading in these massive fixed income markets…remains highly decentralized, occurring primarily through dealers where costs of intermediation are much more difficult to measure,” said Securities and Exchange Commission Chair Mary Jo White in prepared remarks at the Economic Club of New York.
WASHINGTON, June 13 (Reuters) – Despite the continued
fallout of the “Bridgegate” scandal, the Port Authority of New
York and New Jersey will sell $400 million bonds next week.
The Securities and Exchange Commission is conducting a
parallel investigation of the scandal to the New York County
District Attorney’s review, the authority disclosed in
preliminary documents for the sale released on Thursday.