(Add details of new hearing schedule, background on Syncora's
request, Detroit's plan)
July 29 The start of a critical hearing on
Detroit's plan to adjust $18 billion of debt and exit bankruptcy
will be delayed by one week to Aug. 21, a federal judge ruled on
U.S. Bankruptcy Court Judge Steven Rhodes rejected a request
by city creditor Syncora Guarantee Inc to postpone the hearing
until Sept. 29, but said in his order that the bond insurer had
demonstrated the need for a limited delay.
Syncora, which has $400 million at stake in the case, mainly
from insuring Detroit's debt, maintained that a 45-delay was
justified because full documentation of Detroit's settlements
with some creditors was lacking. Syncora said its ability to
prepare for the hearing was "significantly prejudiced" without
The company also noted in a court filing on Monday that the
city had just filed a revised plan on Friday containing
"significant changes" that could have a materially adverse
effect on Syncora's potential recovery in the case.
The fifth revision of Detroit's plan removes any settlement
over $1.4 billion on certificates of participation sold in 2005
and 2006 to boost funding for the city's two retirement systems.
Syncora and Financial Guaranty Insurance Co are on the hook for
paying off the debt, which they insured, and the two have
emerged as the major hold-outs in the case.
Detroit has asked the bankruptcy court to void the pension
debt. The newest version of the plan sets up a litigation trust
that would reward certain creditors with bigger recoveries
should the debt be invalidated.
Rhodes' schedule still envisions a hearing that could extend
until Sept. 23, the same end date he included in a previous
order that had the hearing starting on Aug. 14. Last week, the
judge suggested that the 98 hours each he allotted to the plan's
supporters and opponents could be shortened given recent
settlements between Detroit and some of its creditors.
(Reporting by Karen Pierog and Lisa Lambert. Editing by Andre