CHICAGO — U.S. Bankruptcy Judge Steven Rhodes, who is overseeing Detroit's Chapter 9 case, pushed back by one month a key trial on the city's plan of debt adjustment.
The trial will now start July 16 — nearly one year to the date after the Motor City filed the largest municipal bankruptcy to date.
Rhodes' order came after all of Detroit's major creditors challenged a previous schedule as too speedy. The earlier schedule set a plan confirmation hearing for June 16.
The slight delay will give creditors more time to either challenge the controversial debt plan — which would repay bondholders 20 cents on the dollar — or reach an out-of-court settlement.
The trial could continue July 17-18, 21-25, 28-31, and August 1.
Rhodes set a hearing for April 14 to hear objections to the city's disclosure statement, which includes its long-term restructuring plan. A Detroit attorney said the city expects to file an amended disclosure statement before April 14.
The deadline is June 30 for creditors to vote on the plan and for individual bondholders and individual retirees to object to the plan.
"Nothing herein excuses any party from the continuing obligation to participate in good faith in any mediation as ordered by Chief Judge Rosen," Rhodes wrote in the order, referring to Judge Gerald Rosen, who is overseeing mediation efforts. "Further the court again strongly encourages all parties to negotiate with full intensity and vigor with a view toward resolving their disputes regarding the treatment of claims in the city's plan of adjustment."
Separately, Rhodes set a hearing for April 3 on the city's proposed $85 million settlement with its interest-rate swap counterparties.
