Bankruptcy Judge Steven Rhodes has ordered Detroit and civil rights attorneys into two weeks of confidential mediation over the city's practice of shutting off water to residents with unpaid bills, Reuters reported yesterday. Judge Rhodes will announce on Sept. 17 whether he will issue a temporary restraining order on Detroit's controversial attempt to reduce its $90 million backlog of unpaid water bills, according to an order signed on Tuesday and publicly released on Wednesday. Until then, the court's chief judge, Phillip Shefferly, will mediate negotiations with the bankrupt city and those who filed a class action to stop the city from cutting off water access to delinquent accounts.
http://www.reuters.com/article/2014/09/03/usa-detroit-water-idUSL1N0R40…
In related news, Detroit’s proposal to exit its record municipal bankruptcy by paying retirees more than bond investors will cause “serious mayhem,” an attorney for the plan’s opponents told a judge, Bloomberg News reported yesterday. Marc Kieselstein, an attorney for bond insurer Syncora Guarantee Inc., outlined the opponent’s case against the city’s proposal on the second day of a trial in Detroit federal court. The bond insurer says that the plan would illegally pay retired city workers much more on their claims than investors who hold more than $1.4 billion in pension-related debt. Bankruptcy Judge Steven Rhodes has set aside seven weeks to hear arguments and evidence concerning the plan before deciding whether it’s fair and feasible.
http://www.bloomberg.com/news/print/2014-09-03/detroit-bond-insurer-say…