Progress in Detroit Bankruptcy Mediation
By Keith L. Seat, International Academy of Mediators, April 3, 2014
This post has been viewed 3,574 times.
This post has been viewed 3,574 times.
- The federal judge overseeing mediation in Detroit met with Michigan’s top two legislators to determine their willingness to help resolve the country’s largest municipal bankruptcy. The Michigan Senate and House are both Republican-controlled and lawmakers have proposed using a nearly billion-dollar state surplus to cut taxes. Bloomberg Businessweek (January 16, 2014)
- The federal judge acting as lead mediator was criticized by several major financial creditors and Detroit’s two pension funds for publicly supporting a deal he mediated between Detroit and two global banks; the criticism focused on his support impinging on the confidentiality of the mediation process. Detroit Free Press (January 2, 2014)
- The federal appellate court that is considering the challenge to Detroit’s eligibility for bankruptcy protection stated that it will confer with the lead mediator on the case about the status and time frame for mediation before determining whether to take the case right away. Crain’s Detroit Business (February 10, 2014)
- Detroit submitted its financial restructuring plan to the federal bankruptcy court a week ahead of the court’s deadline. Although much progress has been made in mediation, many issues remain, with objections from a committee of city retirees concerned about cuts to pensions on one hand and bondholders and other creditors complaining about pensioners being favored on the other. Municipal bankruptcies are rare, so there is less clarity about the relative priority of creditors. The governor of Michigan is calling for the plan to be the basis for voluntary settlement as part of the mediation process to resolve thebankruptcy quickly and soften necessary changes. The Wall Street Journal (February 21, 2014); The Wall Street Journal (February 14, 2014)
Tags: Bloomberg Businessweek, Detroit Business, Mediation Process, Michigan Senate
