CHICAGO -- The federal judge overseeing Detroit's bankruptcy has delayed by one week the key trial in the case.

Financial creditors had asked for more time, but Judge Steven Rhodes opted for a seven-day delay in the hearing on the city's bankruptcy exit plan.

In related news, the city decided to drop a plan to hire an expert to monitor the confirmation plan after the bankruptcy, just days after proposing it. And Financial Guaranty Insurance Co. reached an agreement with the state that it would withdraw its subpoena of Michigan Gov. Rick Snyder.

The trial is now set to start on Aug. 21, back from Aug. 14. The city has reached settlements with all its major labor groups, but a handful of financial creditors, all related to the city's bond debt, are on track to challenge the plan. Rhodes said he took into account creditors' requests for delays in making his decision.

"The court concludes that the record does establish extraordinary cause for the limited adjournments of hearing dates and the limited extensions of deadlines set forth in this order," Rhodes wrote. "However, the court again concludes that the record fails to establish cause for the adjournments and extensions that these creditors have requested."

Under the new schedule, all depositions of experts and non-experts need to be completed by Aug. 11. The deadline for objectors to file supplemental objections to the city's plan is Aug. 12, and Aug. 15 is the deadline to file pretrial briefs and for the city to respond to supplemental objections.

The trial will begin Aug. 21. Rhodes set aside the following dates, if necessary, for the trial: Aug. 22, Aug. 25-28, Sept. 2-5, Sept. 8-12, Sept. 15-19, and Sept. 22-23.

Emergency Manager Kevyn Orr said he decided to drop his proposal to hire a post-bankruptcy monitor after talking with state officials and Mayor Mike Duggan and coming to the conclusion that a financial review board and other statutory provisions would provide sufficient oversight, according to local reports.

The city proposed the idea of a monitor as part of its fifth amended confirmation plan, filed July 25.

Meanwhile, FGIC agreed to withdraw its subpoena of Snyder but still plans to subpoena and depose Dennis Muchmore, a top Snyder aide and possibly other members of his staff. FGIC also reserved the right to depose the governor in the future.

The insurer, which is challenging the city's proposal to repudiate $1.4 billion of COPs, on which FGIC is the main insurer, as well as other aspects of the confirmation plan, wants to question Muchmore on topics related to the state's contribution to a plan to boost the city's pensions and protect its art collection, among others.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.