Detroit officials gave Bank of America Corp. and UBS AG until today to say how much they would accept to cancel interest-rate swaps that cost city taxpayers about $4 million a month or face a possible lawsuit, Bloomberg News reported today. The city and the banks have been trying to negotiate a new deal since a federal judge rejected a proposal to pay the banks $165 million to end the swaps. Should the banks make a low enough offer today, the city will keep talking through the weekend in hopes of presenting a new deal to Bankruptcy Judge Steven Rhodes. Without a deal, the city will consider taking legal action to have the swaps declared illegal and to prevent the banks from seizing about $4.2 million in casino taxes held in a custodial account, the person said. The city has paid more than $200 million on the swaps since 2009. Judge Rhodes this month rejected the $165 million proposal, which was a reduction from an earlier agreement to pay $230 million, as “too high a price.” He advised Detroit to seek better terms.
