CHICAGO — U.S. Bankruptcy Judge Steven Rhodes said he expects to rule on Detroit's confirmation plan near the end of the first week of November.
Rhodes also set a date of Oct. 27 for closing arguments in the confirmation trial, which will decide the fate of the city's debt adjustment plan to exit the largest municipal bankruptcy filing in the U.S.
A positive early November ruling would mean the city and Rhodes were able to stick to their original ambitious timeline of emerging from Chapter 9 in little more than a year after the July 2013 bankruptcy filing.
Rhodes said he would make his ruling in open court and that it would likely come during the latter half of the week of Nov. 3.
That means it would follow the Tuesday, Nov. 4 general election, where the bankruptcy of the state's largest city has been a campaign issue in the gubernatorial race between incumbent Gov. Rick Snyder and Democrat Mark Schauer.
Rhodes made the announcement during a hearing Monday on the city's confirmation plan.
The city last week reached a settlement with its final major holdout creditor, bond insurer Financial Guaranty Insurance Co. The deal, which features a mix of cash and downtown Detroit real estate, will likely smooth the city's exit from bankruptcy.
With major settlements in place, Rhodes' ruling will largely focus on the feasibility of the confirmation plan.
Martha Kopacz, an independent finance expert hired by Rhodes earlier this year to analyze the plan's feasibility, is expected to testify Tuesday or Wednesday. Ernst & Young consultant Guarav Malhotra is also expected to testify this week. The revenue projections included in the plan are expected to be a key criteria for feasibility.
The trial will break after Oct. 22 until Oct. 27, when closing arguments will begin.
Also Monday, Rhodes dismissed concerns from the United Auto Workers and the American Federation of State, County, and Municipal Employees Council 25 that the city owes them $174 million in back payments from the so-called 13th check tradition.
Labor attorneys argued that the $174 million was not included in the city's confirmation plan, a claim that Detroit's attorneys denied. Rhodes sided with the city.
The judge also told an attorney representing a committee of retirees to resolve a separate dispute about adding 330 retirees from the Detroit library and convention center to a retiree health care account set up as part of the bankruptcy exit plan.
"Really? Really, 330 employees out of 10,000? Rhodes reportedly asked retiree committee attorney Sam Alberts when Alberts tried to explain his concerns about adding the retirees to the plan.
"I want you to resolve it," the judge said. "Now. Go resolve it."
Detroit's state-appointed emergency manager, Kevyn Orr, took the city into bankruptcy in July 2013.
With the city striking deals with its large labor creditors and bondholders, the closely watched case is unlikely to create legal precedents on treatment of bonds or pensions in Chapter 9.
Rhodes final task is to determine if the plan is fair, feasible, and strong enough to help the city avoid returning to the bankruptcy court with another Chapter 9 filing.
