A U.S. District Court judge on Friday ruled that bond insurer Syncora Guarantee Inc. cannot block bankrupt Detroit's access to casino tax revenue, Reuters reported on Friday. Syncora, which insures some of the city's bonds and interest-rate swaps, appealed an Aug. 28, 2013 ruling by U.S. Bankruptcy Judge Steven Rhodes that gave Detroit access to about $11 million in monthly tax revenue that the insurance company had tried to block. U.S. District Judge Bernard Friedman said that Judge Rhodes had correctly decided that the disputed money was part of the bankruptcy estate. Syncora's attorney, James H.M. Sprayregen at law firm Kirkland & Ellis LLP, said that an appeal will be filed with the U.S. Sixth Circuit Court of Appeals. The company claims it has a lien on the money, which had been used as collateral since 2009 to secure the swap agreements. Detroit, which entered into those agreements to hedge interest-rate risk on pension debt, agreed to a settlement earlier this year to pay $85 million to the swap providers. Syncora has maintained the settlement would cause it financial harm.
