Detroit is close to agreements with more creditors on a plan to reduce its $18 billion debt load, lawyers for the city told a judge who withheld a final ruling on whether to allow a vote on the proposal.
Detroit’s bankruptcy trial ended yesterday without a ruling from the judge on whether the city can remain under court protection, where creditors are limited in what they can do to challenge the city’s restructuring process.
The Los Angeles Dodgers and Major League Baseball attacked each other in court over competing $150 million loan proposals, with baseball Commissioner Bud Selig accusing team owner Frank McCourt of trying to break the rules that keep the league together.
Detroit’s plan to end backfiring interest-rate hedges taken on almost a decade ago is its first step back to the municipal bond market even as investors gird for a return of pennies on the dollar to current holders.
Jefferson County, Alabama, officials shouldn’t worry that a bankruptcy filing will damage their ability to borrow money in the future, said lawyers who guided other municipalities through two of the biggest court-supervised restructurings. The markets will forget, they said.
Detroit faced a “payless payday” before it filed its $18 billion bankruptcy, a financial analyst told the judge conducting a trial to determine whether the city should be stripped of court protection from creditors.