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Detroit, preparing for a final push to end its record-setting bankruptcy, won another 90 days to decide whether to keep or cancel leases on public buildings it uses, including a group of mini-police stations, Bloomberg News reported yesterday. City officials received the extended deadline from Bankruptcy Judge Steven Rhodes in Detroit. The city leases eight police-related buildings, including four mini-stations, as well as other locations. It asked to have until July 2 to decide on the leases.

Bankruptcy Judge Steven Rhodes asked the city of Detroit to provide more specifics on the terms and planned expenditures of a $120 million loan to improve city services, the Detroit News reported today. Judge Rhodes, in a two-page order released on Monday, ordered the city to turn over the details by Friday of the proposal between the city and London-based investment bank Barclays that’s been opposed by some city creditors. A bankruptcy court hearing on the deal is scheduled for April 2.
http://www.detroitnews.com/article/20140325/METRO01/303250070/Detroit-b…

In related news, the Bankruptcy Judge Steven Rhodes wants to appoint at least one of his own expert witnesses to help him evaluate Detroit’s proposed debt-cutting plan, the Wall Street Journal reported today. The unusual move comes as Judge Rhodes is scheduling hearings to consider the city's road map to restructure an estimated $18 billion in long-term obligations by paying secured creditors in full, paying pension funds a reduced amount and giving other unsecured creditors a smaller fraction of the debt outstanding the city owes. With the savings and additional financing, city officials plan to spend $1.5 billion over 10 years for capital improvements, blight removal and equipment and technology upgrades to make the city safer, cleaner and more efficient. (Subscription required.)
http://online.wsj.com/news/articles/SB100014240527023039497045794617602…

The Detroit Water and Sewerage Department plans to come to market with $150 million of new-money sewer bonds in June, despite questions about the water and sewer system's future amid Detroit's bankruptcy, BondBuyer.com reported yesterday. The Michigan Finance Authority will act as the conduit on the deal and proceeds will finance capital improvements for the year. A restructuring of the system's outstanding $4 billion of debt could also be on the horizon as a consequence of Detroit's chapter 9 proceedings. The borrowing comes at a crucial time for the department, which is the object of heated negotiations between the city and adjacent counties. Detroit emergency manager Kevyn Orr wants to lease the system — one of Detroit's strongest assets — to a new regional authority in exchange for an annual payment. The deal has stalled amid disputes over capital costs, uncollected bills, and other disagreements. (Subscription required.)
http://www.bondbuyer.com/issues/123_57/detroit-will-sell-new-sewer-bond…

In related news, Detroit Emergency Manager Kevyn Orr said that time is running out for creditors to reach an agreement with the city on a plan to resolve the biggest U.S. municipal bankruptcy by reducing $18 billion in debt, Bloomberg News reported yesterday. Creditors know all about the city’s finances and don’t need any more information, Orr said yesterday. He said that in the next couple weeks, he hopes to have enough agreement among creditors to get a debt-adjustment plan enacted by fall. Detroit entered bankruptcy July 18.
http://www.bloomberg.com/news/print/2014-03-24/detroit-s-orr-says-time-…

The city of Detroit is still putting the finishing touches on a bankruptcy debt settlement with two global banks, the Detroit Free Press reported today. A Detroit bankruptcy attorney told Bankruptcy Judge Steven Rhodes that the city is still finalizing documents related to its deal to pay $85 million to eliminate a $288 million “swaps” debt with Bank of America Merrill Lynch and UBS. The settlement is not a done deal until the city and the banks give their final approval and until Judge Rhodes signs off. Judge Rhodes — who has twice rejected previous swaps settlements as too generous for the banks — has set a April 3 hearing to consider approval of the new deal.

Michigan Gov. Rick Snyder said yesterday that getting $350 million in state money to put toward a global settlement of the Detroit bankruptcy case could be “extremely difficult” if state lawmakers haven't taken action by May, the Detroit Free Press reported today. But Snyder also said that he — like many lawmakers — is looking for retirees, unions and the city to reach some kind of preliminary agreement as a first step that would make it easier to get the funding package through the Legislature. Snyder has proposed adding $350 million over 20 years from the state’s tobacco settlement fund to about $465 million pledged by foundations and the Detroit Institute of Arts as part of a so-called “grand bargain” intended to minimize the impact of the bankruptcy on Detroit pensioners, while preventing a sell-off of DIA artwork. Snyder has said that the state money, which must be approved by the Legislature, would be conditional on a final settlement signed off on by retirees and city employee unions.

Detroit asked a federal appeals court yesterday to consolidate seven cases seeking to overturn a December ruling that found the city was eligible for chapter 9 protection, Reuters reported yesterday. In a motion, Detroit asked the Sixth Circuit U.S. Court of Appeals to force the parties, including the city's two pension funds, labor unions and retiree groups, to file in one lead case or to jointly file a principal brief accompanied by short individual briefs. If consolidation of the appeals is not granted, the city asked the appeals court to give it more time to respond to the appeals by pushing the deadline the court set earlier this month to June 17 from May 27.

A bond insurer yesterday struck a blow against Detroit’s proposal to exit bankruptcy, arguing in a new lawsuit that Detroit’s approach would illegally discriminate against the city’s third-biggest group of creditors — the investors who provided $1.4 billion for its workers’ pensions nearly a decade ago, the New York Times reported today. Those investors bought “certificates of participation,” which were the first securities Detroit defaulted on as it prepared to file for bankruptcy last summer. The city now contends that the 2005 borrowing was a “sham transaction” and is proposing to give the investors who bought into it one of the lowest recovery rates in its bankruptcy. The insurer, the Financial Guaranty Insurance Company, said in its lawsuit that Detroit “seeks to turn a crooked eye to history.” It said that the city had benefited greatly from the transaction but was now pretending to be “the innocent victim of fraud perpetrated on a grand scale.”

Bankrupt San Bernardino and its biggest creditor, the California Public Employees' Retirement System (CalPERS), said on Thursday that they have made substantial progress in recent negotiations over how much the city will pay the pension fund as part of any bankruptcy package, Reuters reported yesterday. The California city has been in court-ordered mediation talks with its creditors since late last year. It filed for bankruptcy in August 2012 with a budget deficit of $45 million. It is likely to set a precedent on whether retirees or Wall Street bondholders should suffer the most when a local government goes broke. San Bernardino took the unprecedented step of halting its bimonthly employer payments to CalPERS, America's largest public pension fund, for an entire year after filing for bankruptcy protection. It resumed payments in July 2013. It owes more than $17 million to CalPERS, which has assets of $277 billion. A key question in San Bernardino's case is whether the city will seek to reduce its monthly payments to CalPERS through federal bankruptcy protection. More mediation sessions are set for April. The San Bernardino chapter 9 case has progressed slowly, and it is still not clear when the city will produce a bankruptcy plan.

CDR Financial Products Inc. founder David Rubin was spared prison for his role in a municipal bond bid-rigging scheme that involved employees of some of the world’s biggest financial institutions, Bloomberg reported yesterday. Rubin was sentenced to two years’ probation and 500 hours of community service today by U.S. District Judge Kimba Wood in Manhattan. The judge also ordered Rubin and CDR to pay $3.5 million in fines. Since CDR is defunct, Rubin must guarantee his former firm’s $2 million share. Rubin, who must also pay as much as $2.1 million in restitution, pleaded guilty on behalf of himself and his Beverly Hills, Calif.-based firm in 2011, admitting that he took kickbacks for running sham auctions for investments. He was charged in a federal probe of bid and auction rigging in the municipal bond market. The case is U.S. v. Rubin/Chambers, Dunhill Insurance Services Inc., 09-cr-01058, U.S. District Court, Southern District of New York (Manhattan).

Lawyers for the city of Detroit and a retiree committee have reached an agreement to protect committee members from potential lawsuits from retirees unhappy with pension cuts, the Detroit Free Press reported today. A lawyer for the nine-member retiree committee last week asked Bankruptcy Judge Steven Rhodes to force Detroit to pay for a $602,000 insurance policy to cover legal costs for committee members if any of the 23,500 retirees sue the members individually. Judge Rhodes had questioned the pricetag which the city must cover because it is responsible for the committee’s expenses, and noted the money might be better spent improving emergency services for the city. Yesterday, retiree committee lawyer Carole Neville announced that an agreement has been reached but said she did not want to reveal terms of the settlement during the hearing. Lawyer Heather Lennox, who represents the city, confirmed there is an agreement which protects the committee. An order with the details will be filed with the court “expeditiously.”