A federal judge on Wednesday once again delayed the start of the key phase of Detroit's historic bankruptcy case, pushing it to Aug. 29 from Aug. 21.
U.S. Bankruptcy Judge Steven Rhodes on Tuesday had raised the possibility that the confirmation trial, on Detroit's plan to adjust $18 billion of debt and exit the biggest-ever municipal bankruptcy, may be delayed to allow time for the city to incorporate a major settlement over $5.2 billion of water and sewer revenue bonds into the plan.
The judge's new schedule calls for individual creditors who are representing themselves and who are objecting to the plan to present their evidence on Aug. 29.
Starting Sept. 2, the hearing will move onto opening statements from Detroit and from attorneys representing major creditors opposing the plan, including Syncora Guarantee, a bond insurance company that has launched a fierce battle on many fronts of the bankruptcy.
The trial, in which Rhodes will have to decide if the debt adjustment plan is fair and feasible, could now stretch through Oct. 17. Meanwhile, Kevyn Orr's 18-month term as Detroit's emergency manager is scheduled to end in late September and the city's attorneys have been pushing for a speedy trip by the city through bankruptcy court as a result.
Rhodes in February originally set a June 16 start date for the confirmation hearing but revised the schedule several times to later dates as the case progressed.
In a court order filed late Wednesday, Rhodes also allocated 85 hours to each side for presenting their cases, adding that the 3.25 hours for his tour last week of Detroit would be deducted from the city's portion of time. Originally, he had allotted 98 hours each to the city and other supporters of the restructuring plan and to creditors objecting to the plan.
The order also directed Detroit to present details at the confirmation hearing on how a Michigan law creating an oversight commission for the post-bankruptcy city will be implemented.
The law, which was enacted in June as part of Michigan's $195 million contribution to the plan, creates a nine-member panel that will stay active until Detroit meets certain financial thresholds.
Detroit had included a court-appointed, post-bankruptcy monitor in a revised plan it filed last month but days later dropped that idea, saying it would be redundant given the state oversight. [IDnL2N0Q51HN]
(Reporting by Lisa Lambert and Karen Pierog; Editing by Chris Reese, Dan Grebler and Steve Orlofsky)