CHICAGO -- Detroit's proposed $120 million loan from Barclays advanced Tuesday with approval from a key Michigan board.
The city still needs the approval of U.S. Bankruptcy Judge Steven Rhodes, who is overseeing the city's Chapter 9 bankruptcy case. Rhodes will hold a hearing on the deal April 2.
The state emergency loan board approved the controversial financing by a 3-0 vote during a brief meeting late Tuesday. The Detroit City Council has already okayed it.
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.
In an order filed late Monday, Rhodes said he wants the city to provide more information on the deal by March 28, ahead of next week's hearing.
"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.
