(Recasts, adds second byline, original start date, judge's
order for details on post-bankruptcy oversight)
By Lisa Lambert and Karen Pierog
Aug 13 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
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
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
(Reporting by Lisa Lambert and Karen Pierog; Editing by Chris
Reese, Dan Grebler and Steve Orlofsky)