Bankruptcy Judge Steven Rhodes said yesterday that he will rule April 11 on a proposal to end costly interest-rate swap agreements, a key issue as the city seeks to exit bankruptcy later this year, Reuters reported yesterday. Judge Rhodes made the announcement after a day-long hearing that included testimony by Detroit Emergency Manager Kevyn Orr, who defended a proposed $85 million payment to UBS AG and Bank of America unit Merrill Lynch Capital Services to terminate soured swaps that were used to hedge interest rate risk on Detroit's pension debt. The money owed to the investment banks helped drive Detroit to file the biggest municipal bankruptcy in U.S. history in July 2013. A plan to end the swaps at a discount has been a key facet of Detroit's case since then.
http://www.reuters.com/article/2014/04/03/usa-detroit-bankruptcy-idUSL1…
In related news, Detroit’s Emergency Manager Kevyn Orr said that the city may be able to conclude its record $18 billion bankruptcy in October, less than 18 months after seeking court protection from creditors, Bloomberg News reported yesterday. Orr told U.S. Bankruptcy Judge Steven Rhodes yesterday that Detroit was “hoping” to exit by Oct. 15. Michigan’s biggest city filed for bankruptcy in July after decades of decline, saying it couldn’t pay creditors while also providing essential services to its 700,000 residents.
http://www.businessweek.com/news/2014-04-03/detroit-manager-says-city-m…