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U.S. Bankruptcy Judge Steven Rhodes in Detroit have received word from creditors, including bond insurers who are opposed to the plan, who have said that the city has been too slow in providing key documents to help them prepare for a July confirmation trial, according to Bloomberg News.
The city of Detroit is making an effort to resolve its record $18 billion bankruptcy by October. Bloomberg News has reported that Michigan’s biggest city filed for bankruptcy last year saying that it could not meet all its financial obligations and still provide essential services.
The emergency manager appointed to repair the city’s finances, Kevyn Orr, has said Detroit could exit bankruptcy in October.
Greg Shumaker, another lawyer for the city, said in a Bloomberg News report, “When Orr steps aside that could have a dramatic impact.”
An attorney for bond insurer Syncora Guarantee Inc., Stephen Hackney, told the judge, “The city’s actions are crippling our efforts.” Stephen Hackney went on to say, “No one can perform under this schedule.”
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Scott Hagerstrom, the state director of the group Prosperity-Michigan, a conservative group backed by billionaire industrialists Charles and David Koch, said Detroit, is already the top city recipient of state revenue sharing, and that it should be selling assets such as art rather than looking to Michigan for a bailout.
Creditors are now seeking more specific data behind the city’s debt-cutting plan. The city, according to Bloomberg News, has said that some of the creditors are asking for excessive and unnecessary information. “Multiple requests are fine, but we need to be reasonable,” a lawyer for Detroit, Heather Lennox of Jones Day, told the judge.
On May 21, 2014, JPMorgan Chase & Co. unveiled a $100 million, five-year commitment to support and accelerate Detroit’s economic recovery and strengthen its communities.
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Image credit: www.businessinsider.com
