Daily Briefs

 Judge approves swaps deal with 2 banks 

DETROIT (AP) — A federal judge on Friday approved bankrupt Detroit’s plan to settle a bad multi-million dollar pension debt deal with two banks.

Judge Steven Rhodes signed off on the agreement to pay $85 million to UBS and Bank of America.
 
“The amount is reasonable and quite fairly compromises the counter-parties’ claims,” the judge said of the deal in which each bank will get $42.5 million secured from casino revenue.

It will be paid off in monthly, $4.2 million installments, Rhodes said during a hearing Friday morning.

Rhodes said the plan decreases the amount Detroit owes to the banks and extends the amount of time the city has to pay what is owed. Plus, it doesn’t need a loan to pay it off, he said.
Rhodes had denied earlier proposals for $220 million and $165 million settlements.

Detroit had pledged casino tax revenue in 2009 as collateral to avoid defaulting on pension debt payments, which allowed the city to get fixed interest rates on pension bonds with the banks. But the deal became too costly when interest rates plunged.

The swaps deal is key to Orr’s plan to restructure Detroit's debt. The two banks have said they will support Orr’s plan.
 

Wayne County asks bankruptcy court for mediator in stalemate

Wayne County today filed a Motion for the Appointment of a Mediator to break the impasse in negotiations to create a regional authority to run the Detroit Water & Sewerage Department. The motion was filed with Judge Steven Rhodes of the United States Bankruptcy Court for the Eastern District of Michigan.
 
The motion requests that a court-appointed mediator be empowered to resolve the issues of outstanding information and documents the counties have been seeking for months from the Emergency Manager and to bring the parties back to the table to continue negotiations for the creation of a regional authority to run the DWSD. 

After months of discussions leading to the current stalemate over a regional authority to oversee the Detroit Water and Sewerage system, Wayne County Executive Robert Ficano is optimistic that a mediator/facilitator can help break through some of the roadblocks to a regional solution.

“We continue to believe that a regional authority, on the right terms that work for the ratepayers, is still the way to go. With the court’s assistance, I believe people of good faith can still get a deal done that works,” said Ficano.

As the process has broken down over the past several weeks, there has been a volley of letters sent between the EM and the counties. 

“While positions have hardened on both sides of the table, I am hopeful that an appointed facilitator/mediator can breathe new life into the process,” said Ficano.

Shannon Price, Wayne County Commissioner and chairman of the Wayne County Commission Water Task Force also supports a facilitator/mediator to help continue talks. 

The Motion for the Appointment of a Mediator was filed on Wayne County’s behalf by Attorney Max Newman of the Butzel Long law firm.

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