CHICAGO — Menasha would pay holders of $23 million of defaulted steam-plant bond anticipation notes $17.5 million under a proposed cash settlement that would end bondholder litigation and put the Wisconsin city on a path towards rebuilding its credit.

The city defaulted on the notes in September 2009. The notes include $12 million sold in 2005 to convert Menasha Utilities' power plant to coal-fired steam operations and $11 million issued in 2006 to cover the project's growing costs.

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