The U.S. Court of Appeals for the Sixth Circuit yesterday had some criticism for a bond insurer’s bid to block Detroit from accessing casino revenue, with one judge calling the creditor’s efforts “fairly Draconian,” the Detroit News reported today. The panel was considering an appeal from Syncora Guarantee Inc., a holdout creditor in the city’s bankruptcy case that is fighting lower court rulings that $15 million a month in casino revenue belongs to bankrupt Detroit. Judge Julia Smith Gibbons gave no timeline for a decision but said the three-judge panel would consider the arguments “carefully.” The appeal by Syncora could determine whether Detroit can keep the casino cash — labeled by the city its best revenue stream — and spend it on public safety services and paying other creditors, including workers. The hour-long hearing in the Sixth Circuit Appeals Court ended with no resolution for Detroit or Syncora. Syncora was in court appealing orders from Detroit’s bankruptcy judge and a U.S. District Court judge that casino revenue belongs to the city while it is in bankruptcy court.
