Bankruptcy Judge Steven Rhodes ruled yesterday that the start of a critical hearing on Detroit's plan to adjust $18 billion of debt and exit bankruptcy will be delayed by one week to Aug. 21, Reuters reported yesterday. Judge Rhodes rejected a request by city creditor Syncora Guarantee Inc. to postpone the hearing until Sept. 29, but said in his order that the bond insurer had demonstrated the need for a limited delay. Syncora, which has $400 million at stake in the case, mainly from insuring Detroit's debt, maintained that a 45-delay was justified because full documentation of Detroit's settlements with some creditors was lacking. Syncora said that its ability to prepare for the hearing was "significantly prejudiced" without the documents. The company also noted in a court filing on Monday that the city had just filed a revised plan on Friday containing "significant changes" that could have a materially adverse effect on Syncora's potential recovery in the case. The fifth revision of Detroit's plan removes any settlement over $1.4 billion on certificates of participation sold in 2005 and 2006 to boost funding for the city's two retirement systems. Syncora and Financial Guaranty Insurance Co. are on the hook for paying off the debt, which they insured, and the two have emerged as the major hold-outs in the case.
