The U.S. bankruptcy court judge in the Detroit bankruptcy case yesterday removed allegations made by one of Detroit's remaining holdout creditors against mediators in the city's municipal bankruptcy case, Reuters reported today. Hon. Steven Rhodes chastised Syncora Guarantee Inc. for claiming in an Aug. 12 court filing that the mediators, Chief District Court Judge Gerald Rosen and attorney Eugene Driker, are biased. "The court finds that the allegations concerning the mediators ... are scandalous and defamatory," the ruling stated. It added that the bond insurance company's "highly personal attack" on Rosen was legally and factually unwarranted, unprofessional and unjust. James H.M. Sprayregen, an attorney with Kirkland & Ellis representing Syncora, said that they "respectfully disagree with Judge Rhodes." In its court filing, Syncora lashed out at the mediators, who brokered the so-called grand bargain, with allegations of improper conduct and conflicts of interest. A hearing to determine whether Detroit’s debt-adjustment plan is fair and feasible is scheduled to begin on Tuesday.
