Bond insurer Syncora Guarantee Inc. has emerged as Detroit's chief nemesis in the city's historic bankruptcy case and is fighting as if its financial life depends on a decent recovery on its $400 million exposure to the city, Reuters reported today. Since Detroit filed the biggest municipal bankruptcy in U.S. history last July, Syncora has objected to the city's moves nearly every step of the way — from an early agreement with investment banks over interest rate swaps to the more recent "grand bargain" designed to save the Detroit Institute of Arts. The company's latest pleading, set for argument today in a federal courtroom, demands information on the current assets and income of all Detroit's retired workers — some 20,000 of them. Syncora has issued past warnings to investors that it might go out of business, and it cautioned in a recent financial report that investment in Syncora Holdings common shares is "likely to result in a loss of substantially all of their investment." In the financial statement, Syncora warned of a "liquidity mismatch" in which claims might exceed recoveries from the claims, and noted that reserves for losses "are modest" when compared with estimated future claims.
