Detroit Must Pay to Retrieve Secret Documents, Judge Says

Detroit must pay $10,000 to cover the cost of recovering hundreds of confidential documents it accidentally sent to creditors this year during its record municipal bankruptcy, a judge said.

U.S. Bankruptcy Judge Steven Rhodes today ordered the city to pay the legal fees of one creditor who fought to force the city to get back the documents, which are part of confidential mediation sessions. Rhodes found that the city made the problem worse by refusing to act quickly enough to get the material back after it learned about the problem.

Since filing its $18 billion bankruptcy one year ago, the city has negotiated with creditors in mediation sessions overseen by a federal judge. During those sessions the city and its creditors exchanged confidential documents that Rhodes ordered to remain secret.

While exchanging information with creditors in preparation for an August trial on the city’s plan to cut its debt, a lawyer for Detroit accidentally included some of the restricted information.

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

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