CHICAGO — U.S. Bankruptcy Judge Steven Rhodes, who is overseeing Detroit's bankruptcy case, ordered the city Monday to provide more information about a proposed $120 million loan from Barclays in light of several objections.
Detroit on March 6 asked Rhodes to approve the $120 million debtor-in-possession loan. It's the latest in a series of proposed loans from Barclays. The proposed loan is down from the original $350 million size and uses new collateral, among other changes.
Several major creditors, including a group of European banks, bond insurer Syncora Guarantee Inc., and the city's two pension funds, have challenged the deal in court.
A hearing on the matter has been set for April 2.
In an order filed late Monday, Rhodes said he wants the city to provide more information on the deal.
"Several parties have filed objections to the proposed final order," Rhodes wrote. "Having reviewed the objections, the court concludes that its consideration of this matter would be more efficient for all concerned if the city made certain information available."
Rhodes ordered Detroit to provide final copies of all the financing's documents and all material terms of the loan, including the interest rate, terms , fees, costs, and market flex provisions. The judge also wants a comparison of the terms of the current deal with the terms of an initial loan that was preliminarily approved by the court in January. The city also needs to detail how to plans to use the loan proceeds with a schedule of the expenditures and budgets.
The documents are due by Friday, March 28.
Also Monday, Rhodes said he is might appoint a municipal finance expert to independently analyze the feasibility of the city's plan of confirmation. The court has an obligation to determine whether a Chapter 9 confirmation plan is feasible, the judge said.
"The court finds that this is particularly important in this case, given the purposes of Chapter 9 and the broad reinvestment initiatives the city has included in its proposed plan of adjustment."
A hearing on the judge's draft order will be held April 2.
