The city of Detroit’s restructuring plan was supposed to tie its creditors’ fate to an economic revival of the municipality. The arrangement hasn’t worked out as planned since Detroit’s 2014 exit from chapter 9 bankruptcy, according to court papers, according to a WSJ Pro Bankruptcy analysis. An affiliate of New York bond insurer Financial Guaranty Insurance Corp. says that the city failed to hold up its end of a development deal for the Joe Louis Arena site in downtown Detroit. FGIC sued the city in bankruptcy court on Monday, seeking a court order extending by two years a deadline to submit a redevelopment proposal. The complaint accused city officials of refusing to grant the requested extension while offering only another 180 days for FGIC to get its paperwork in order. FGIC says that it is entitled to the full extension under the terms of Detroit’s restructuring plan.
