CHICAGO -- Detroit wants a June 9 deadline for creditors to vote on its controversial debt adjustment plan.
The city wants to begin soliciting creditors' votes on April 24, roughly two months after it released the plan, according to a late-Friday court request for approval of procedures for solicitation and tabulation of creditors' votes that the city filed with U.S. Bankruptcy Judge Steven Rhodes.
Time is of the essence for Detroit's citizens, the city argued
"Those who live and work in the city and depend on its ability to provide them with efficient and effective services to maintain an appropriate quality of life are the true victims of delay," the city argued. "It is essential to conclude this Chapter 9 case as soon as possible so that the city can return to a condition that its citizens have a right to expect."
Detroit filed the voting schedule request just minutes after all the city's major creditors filed their own requests that Rhodes delay the fast-track bankruptcy schedule for a month or more.
The battle over the schedule comes a week after Detroit's attorneys filed the city's all-important formal proposals for how to treat its creditors and restructure the city.
In its latest filing, Detroit said it expects to solicit votes on April 24 from more than 170,000 individual creditors. It wants to use Kurtzman Carson Consultants LLC as the solicitation, claims, and balloting agent.
The deadline for responding, if the court approves, would be June 9.
"The city submits that a 45-day solicitation period provides sufficient time for creditors to make informed decisions to accept or reject the plan and to submit timely ballots," the filing said.
Detroit said it expects some disputes over which entity has the right to vote on a particular claim, referencing in particular bond insurers.
Attorneys outlined a proposed procedure if that happens, which features a deadline of March 24 for parties that assert the right to vote to file a notice. The affected claimholder would then have until April 4 to respond. If they can't come to an agreement on their voting rights by April 11, then the court would determine the matter by April 14, according to the proposal.
The court motion also says that it will give holders of the $1.4 billion of disputed certificates of participation an option to vote on a settlement. The city repudiated the debt recently in a lawsuit that argues the certificates were filed illegally, but it says that holders will be given a chance to vote on a proposed settlement.
Detroit also suggested that Rhodes push back a trial on the confirmation plan to June 23 from June 16.
Bond insurers and other creditors requested that Rhodes push the trial back by one month, and Syncora Guarantee Inc. requested that it be pushed by three months.
