Detroit Judge Withholds Final Ruling on Plan DisclosureSteven Church
Detroit’s bankruptcy judge withheld a final ruling on whether to approve materials explaining to creditors the city’s plan to shrink $18 billion in debt.
U.S. Bankruptcy Judge Steven Rhodes overruled initial objections to the disclosure statement today at a hearing in federal court in Detroit. The city asked Rhodes to schedule another hearing later this month to resolve any further objections and have the judge make a final ruling.
Detroit will add more details about the plan to the disclosure statement, which will help creditors decide how to vote, after reaching agreements this month with some bondholders and the city’s two pension systems.
The city will seek to reclaim $239 million in overpayments to retirees as part of its plan to end the biggest-ever U.S. municipal bankruptcy, a lawyer for the city said.
Under a deal with the city’s pension systems on cuts to retirees’ monthly payments, the two sides agreed to cap the amount overpaid retirees must repay at 20 percent of what they received.