A consultant's report released yesterday said that holders of Detroit's $164 million of unsecured, limited-tax general obligation (GO) bonds would only get 34 percent of their investment back under the city's debt adjustment plan, Reuters reported yesterday. The 34 percent recovery listed in the July 8 report by Kenneth Buckfire, president of restructuring firm Miller Buckfire & Co., is higher than the estimated 10 percent to 13 percent rate Detroit outlined in its latest plan to adjust $18 billion of debt and exit bankruptcy. But the rate is lower than the 74 percent recovery on $388 million of unsecured unlimited-tax GO bonds, which are backed by voter-approved property taxes. Last month, federal court mediators announced a settlement over the treatment of the limited-tax bonds in Detroit's historic bankruptcy case, but disclosed no details. The announcement followed a mediation session between the city, Ambac Assurance Corp., which guarantees payments on most of the bonds, and mutual fund BlackRock Financial Management.
