Detroit on verge of major creditor deal
The deal will settle the company's $400 million claim in the nation's largest-ever municipal bankruptcy case
DETROIT—Detroit has reached a tentative deal to pay a key creditor 26 cents on the dollar, a move that that could clear the biggest hurdle in the city’s plan to reduce its debts and emerge from federal bankruptcy protection.
A September 9 court filing says Detroit and the bond insurer Syncora Guarantee “have reached an agreement in principle” to settle the company’s $400 million claim in the nation’s largest-ever municipal bankruptcy case.
Syncora spokesman Steven Schlein tells The Associated Press the company would get 26 per cent of what it’s owed.
The two sides ask Judge Steven Rhodes to postpone the bankruptcy case trial until September 12.
Syncora Guarantee and fellow bond insurer Financial Guaranty Insurance Co. have led a small group of creditors fighting emergency manager Kevyn Orr’s plan.