CHICAGO — Bond insurer Financial Guaranty Insurance Co. has subpoenaed Michigan Gov. Rick Snyder for a deposition in the Detroit bankruptcy case.
FGIC also sent a subpoena to Sean Werdlow, managing director at Siebert Brandford Shank Co., LLC, who served as Detroit's chief financial officer from 2002 to 2005.
The firm also subpoenaed Dennis Muchmore, one of Snyder's top aides, and the executive office of the governor of the State of Michigan.
Snyder's notice orders him to the Westin Book Cadillac Detroit hotel on July 3 for a videotaped deposition. Werdlow is to be deposed on July 10, and Muchmore on July 3.
The insurer wants the parties to bring with them various documents related to the aspects of the bankruptcy, including the city's two pension funds, communications between the city and the state after 2005 related to revenue-sharing, other state fund, revenue-sharing projections, and documents related to the state's $195 million contribution to the city's bankruptcy "grand bargain."
FGIC insures a chunk of the $1.4 billion of pension certificates of participation that the city issued in 2005 to fund its pension systems. The city in January filed a lawsuit attempting to repudiate the debt, arguing it was illegally issued. FGIC and the COPs holders are among the few remaining holdout financial creditors to not yet reach a settlement with Detroit.
Snyder was deposed once before, earlier in the case, when labor unions questioned him as part of the trial to determine whether the city was eligible for Chapter 9 protection.
Siebert acted as the city's counterparty on several interest-rate swaps that hedged $800 million of the COPs.