Detroit bankruptcy trial has begun
A battle is brewing in the historic trial as bond insurer Syncora Guarantee says the plan unfairly discriminates against financial creditors
DETROIT—Opening statements in Detroit’s historic bankruptcy trial have begun in federal court.
Attorney Bruce Bennett, one of the city’s lawyers, began opening statements September 2 before Judge Steven Rhodes.
Bennett said progress “has been made, but the city is still in distress.”
Detroit expects to cut $12 billion in unsecured debt to about $5 billion.
Most creditors, including more than 30,000 retirees and city employees, have endorsed the restructuring plan put together by state-appointed emergency manager Kevyn Orr and his team.
One of the keys is a commitment from the state, corporations and foundations to donate $800 million to soften cuts to city pensions. In return, city artwork would be protected from being sold.
Bond insurer Syncora Guarantee opposes the plan and says Detroit has unfairly discriminated against financial creditors.