Detroit bankruptcy

Detroit Friday gained Michigan's final approval for a plan to issue $1.1 billion of bonds for a bankruptcy exit financing and to raise money to pay off several creditors.

Detroit officials regained control of most government functions, while remaining under state-controlled emergency management, after the city council late Thursday adopted a resolution that keeps Kevyn Orr on as manager with reduced powers until the bankruptcy is over.

A Michigan board Wednesday voted to approve two emergency loans to cash-strapped Detroit suburbs, which are under state control, that will be used for pension payments.

Detroit officials could announce the future of emergency manager Kevyn Orr's role in the bankrupt city after his term ends Sept. 27. Some city council members reportedly favor a limited role to oversee the final weeks of the bankruptcy.

Bond insurer Financial Guaranty Insurance Co., standing alone as the last major creditor holding out in the Detroit bankruptcy, challenged the city's recent settlement with fellow insurer Syncora Guarantee Inc.

The Detroit City Council Friday approved a new regional water authority to take over the bulk of the Detroit Water and Sewer Department and also gave the green light to the city's bankruptcy settlement with bond insurer Syncora Guarantee Inc.

Any sale of the art in the Detroit Institute of Arts would make the DIA "persona non grata in the museum world," a museum official and an art finance consultant testified at a trial on the city's bankruptcy exit plan.

The Michigan Strategic Fund approved the issuance of $450 million of 30-year bonds to finance a new hockey stadium near downtown Detroit, a transaction that will feature a mix of tax-exempt and taxable debt, a mandatory tender and interest-rate swaps.

The two counterparty banks on Detroit's interest-rate swaps no longer need to drop their claims against Syncora Guarantee Inc. after Syncora agreed to modify its settlement with the city.

Detroit and Syncora Guarantee Inc. said Monday they've reached a final settlement that is expected to accelerate the city's exit from the largest municipal bankruptcy in the U.S.

Bond insurer Financial Guaranty Insurance Co. asked the federal court to delay the Detroit bankruptcy trial for at least a week to give it time to prepare new legal strategy in light of the city's proposed settlement with Syncora Guarantee Inc.

Syncora Guarantee Inc. is pushing back against widely reported claims that it is receiving 26 cents on the dollar in its tentative settlement with Detroit, saying the actual recovery is “much lower than reported.”

Detroit's chief bankruptcy mediator ordered FGIC, the last holdout creditor, into talks with the city and Syncora Guarantee Inc. and other major creditors on Friday to try to resolve a dispute over $1.5 billion of certificates of participation.

Detroit and Syncora Guarantee Inc. will spend the next few days working to finalize a major agreement that would speed up the bankruptcy, but important questions remain in the case, muni market experts said.

Detroit's historic bankruptcy case saw a major breakthrough late Tuesday when the city and its strongest opponent, bond insurer Syncora Guarantee, announced they had reached an agreement in principal.

Detroit Mayor Mike Duggan said emergency manager Keyvn Orr will likely serve as a consultant to the city's bankruptcy after his tenure as emergency manager expires at the end of the month.

Detroit has reached a deal to spin its troubled Water and Sewerage Department to a new regional authority, that allows up to $800 million of new money bonds for capital improvements to assets located in the city limits.

Pension obligations are no different than borrowing obligations, public finance expert Richard Ravitch told a group of investors in New York.

Detroit entered the second week of the confirmation trial for its bankruptcy exit plan Monday, calling witnesses who testified to the city's desperate need for the $1.5 billion of capital investments featured in the plan.

Detroit's first witness in its bankruptcy trial, CFO John Hill, testified that the city's confirmation plan would mean more money for the struggling city but that meeting some of the revenue targets could be difficult.