Detroit Judge Delays Bankruptcy Trial by Almost a Month

Detroit’s court battle over its plan pay creditors less than they are owed in order to exit bankruptcy was delayed almost a month by the federal judge overseeing the case to give the parties more time to get ready.

U.S. Bankruptcy Judge Steven Rhodes in Detroit yesterday moved the start of the trial to Aug. 14 from July 16. The judge blamed the delay on the need to provide creditors with a large amount of information to prepare their cases against the city’s $18 billion debt-adjustment plan.

Rhodes denied a request by creditors to have the trial begin in mid-September, saying that while the city bears responsibility for the delay, at least one creditor made “unreasonable” demands for documents.

Since filing for bankruptcy last year, Detroit has negotiated deals with city unions and retiree groups to limit how deeply their pensions will be cut. Bond insurers, including National Public Finance Guarantee Corp., have fought plans to pay unsecured bondholders less than they are owed.

The case is In re City of Detroit, 13-bk-53846, U.S. Bankruptcy Court, Eastern District of Michigan (Detroit).

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To contact the editors responsible for this story: Andrew Dunn at Stephen Farr

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