Bankruptcy Judge Steven Rhodes granted a motion by Detroit to delay a hearing on a controversial deal between the city and banks aimed at ending interest-rate swap agreements, Reuters reported yesterday. In his order, Judge Rhodes said that the hearing that had been slated to start on Tuesday will be adjourned to a date to be determined. The ruling came after Detroit earlier yesterday requested the court give it additional time to negotiate with bond insurers, retirees, pension funds and some bond holders who objected to the city's deal with swaps counterparties Merrill Lynch Capital Services and UBS AG. The city aims to end the swaps at a discount and free up casino tax revenue used as collateral for the swap agreements. The city could use casino revenue, which totals as much as $180 million a year, in debtor-in-possession financing that would enable Detroit to settle with swaps counterparties and provide more funds toward the city’s financial recovery.
http://www.reuters.com/article/2013/09/23/usa-detroit-swaps-idUSL2N0HJ1…
In related news, Bankruptcy Judge Steven Rhodes scheduled a hearing for Oct. 2 to consider the NAACP’s argument that its ongoing challenge to the state’s emergency manager law should be allowed to proceed outside of bankruptcy court, the Detroit Free Press reported today. The Michigan and Detroit chapters of the NAACP joined with Donnell White, Thomas Stallworth III, Rashida Tlaib and Maureen Taylor to file a lawsuit in May seeking to overturn the emergency manager law as unconstitutional because it infringes on voter rights. Their lawsuit, filed in May in the U.S. Eastern District Court of Michigan, was immediately delayed by Detroit’s bankruptcy case. The plaintiffs told Judge Rhodes that their lawsuit should be allowed to proceed because they are “not seeking any damages, contractual claims or similar related relief that would implicate the city’s finances.”
http://www.freep.com/article/20130923/NEWS01/309230078/NAACP-Kevyn-Orr-…