Detroit released a revised debt adjustment plan on Friday that details the role of a post-bankruptcy monitor and sets up a reserve fund to possibly enhance recoveries for certain creditors, Reuters reported on Friday. The fifth revision of the plan filed in bankruptcy court creates a litigation trust related to Detroit's lawsuit seeking to void $1.45 billion of pension certificates of participation (COPs) sold in 2005 and 2006. Should Detroit prevail in the suit, money the city would have had to use to pay off the debt would instead be divvied up, with 65 percent going to the voluntary employees' beneficiary associations set up for city retiree healthcare costs and 20 percent going to limited-tax general obligation bondholders. A class of miscellaneous claims would receive the remaining 15 percent. Bankruptcy Judge Steven Rhodes, who has yet to take up substantive issues in the COPs lawsuit, plans to start a confirmation hearing on Detroit's plan Aug. 14.
