Detroit Seeks to Pay UBS, BofA $230 Million to End Swaps
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Detroit, the biggest U.S. city to file for bankruptcy, is seeking a permission to pay UBS AG and Bank of America Corp. $230 million to cancel payments on swaps that threaten the city’s revenue from casino taxes.
A three-day trial began today before U.S. Bankruptcy Judge Steven Rhodes in Detroit on the city’s request to make the payment as part of a deal to cancel interest-rate swap contracts that have cost it about $4 million a month since July 2009. To pay for the settlement, the city wants Rhodes to let it borrow $350 million.