CHICAGO — Bankruptcy Judge Steven Rhodes delayed the start of a trial on the Detroit's restructuring plan, pushing the start date back by eight days to Aug. 29 to make time for city's hoped-for settlement with its water and sewer bondholders.
Rhodes issued the order Aug. 13 after a hearing in which creditors asked for more time, in part to gauge the impact of the city's recent, high-profile plan to refinance $5.2 billion of water and sewer bonds.
The city has given water and sewer bondholders until Aug. 21 to tender their bonds. That's the same day the original trial was set to begin. A final settlement with the bondholders may not come for days or weeks after that, when the city repays the tendered debt with proceeds from a planned refinancing. The city then plans to submit an amended plan of confirmation.
"You're asking the court to start a confirmation hearing on a plan you don't want confirmed, knowing you're going to file a plan two weeks later that you do want confirmed," Rhodes told city attorneys at the hearing. "That's very tough."
In his subsequent court order, Rhodes called the city's intention to file another amended plan an "extraordinary cause" to delay the trial.
Detroit wants Rhodes to approve the financings on Aug. 25, and head into the market or do a private placement by Aug. 26.
The confirmation plan trial will begin on Aug. 29 with testimony from retirees who want to weigh in on the city's bankruptcy. Opening statements from attorneys will commence on Sept. 2. Additional dates are: Sept. 3-5; 8-12; 15-19; 22-24; Sept. 29-Oct. 3, Oct. 6-7, and 14-17, if necessary.