DETROIT Feb 10 Detroit will file a plan to
adjust its debt with the U.S. Bankruptcy Court next week, an
attorney representing the city told the judge overseeing the
case on Monday.
Bruce Bennett, an attorney with law firm Jones Day, told
Judge Steven Rhodes that Detroit's filing target of Friday was
too tight and needed to be extended.
The city, which filed the biggest municipal bankruptcy in
U.S. history in July, sent a proposed plan to creditors on Jan.
29, saying it expected to submit a plan to the court in about
two weeks. Rhodes had set an ultimate deadline
of March 1 for the city to produce its required roadmap out of
A copy of the confidential proposal obtained by Reuters
indicated that Detroit's two pension funds, its largest
unsecured creditors, would fare better than owners of city bonds
that are also considered unsecured debt.
The proposal, which was crafted by Detroit Emergency Manager
Kevyn Orr and his team of consultants based on discussions with
creditors, also excluded interest-rate swap agreements from the
settlement plan after Rhodes twice rejected agreements between
the city and swap providers to end them at a discounted cost.
Bill Nowling, Orr's spokesman, said last week that talks
were ongoing with UBS AG and Merrill Lynch Capital Services over
the swaps, which were used to hedge interest rate risk on some
of the $1.45 billion of pension debt Detroit sold in 2005 and
2006. Detroit on Jan. 31 filed a lawsuit seeking to invalidate