(Adds quotes, more details)
By Edward Krudy
NEW YORK, March 24 Detroit's emergency manager
expects the city's $18 billion bankruptcy plan to win court
approval by the fall despite obstacles such as a dispute over
swap agreements and a vote by retirees on the plan that could
potentially slow or derail the process.
The Motor City filed for bankruptcy more than a year ago in
the largest municipal filing in U.S. history, pitting pensioners
against bondholders and threatening the city's world-class art
collection with liquidation.
"We hope to have the hearing completed by the middle of
August or so," the state-appointed manager, Kevyn Orr, said on
Monday during an event on Detroit's historic bankruptcy filing
at the Manhattan Institute.
"The court would either approve or disapprove - we hope it's
going to approve - that plan after the hearing in August,
hopefully by the fall," Orr said at the conference, which also
featured Michigan Governor Rick Snyder.
A U.S. Bankruptcy Court under Judge Steven Rhodes is hearing
Among the many obstacles the city must navigate are swap
agreements that Detroit entered into with banks to hedge against
interest rate risk. Orr is currently seeking court approval for
an $85 million deal to settle those agreements after a judge
rejected two previous deals because they were too expensive for
However, any deal will likely face opposition from Syncora
Guarantee, a lawyer for the company has said. Syncora insured
some of the city's pension debt associated with the swaps.
"They have an opportunity to file their objection and the
court is going to hear this," said Orr on the sidelines of the
conference. "Hopefully third time is a charm."
On Monday, the Detroit News reported that about 32,000
municipal retirees and beneficiaries will soon vote on the
restructuring plan and will receive ballots before April 28.
Orr spokesman Bill Nowling said the unusual balloting
process will be filed with the courts "as soon as it is ready."
(Additional reporting by Lisa Lambert; Editing by Diane Craft)