A federal judge yesterday ordered ongoing mediation in Detroit's historic bankruptcy over a potential settlement between the city and one of its fiercest creditors, and added holdout creditor Financial Guaranty Insurance Co. to the list of parties whose attendance is required, Reuters reported yesterday. U.S. District Judge Gerald Rosen, the chief mediator in the city’s bankruptcy case, ordered that mediation, which began yesterday, will also take place today and will continue "day-to-day thereafter as deemed necessary, until released by the mediators." The city and Syncora Guarantee Inc, the bond insurer that had been the fiercest holdout creditor in the case, notified the bankruptcy court on Tuesday that they had reached a settlement in principle. Sealing that deal would leave FGIC, another bond insurer, as the only major holdout creditor left in the Detroit bankruptcy. Both Syncora and FGIC faced recoveries of 10 cents on the dollar or less in the bankruptcy as other creditors including the city's pension funds reached deals. U.S. Bankruptcy Judge Steven Rhodes on Wednesday put Detroit's case on hold until Monday in the wake of the potential deal.
