Detroit — A group of holdout creditors wants to delay a trial over the city’s debt-cutting plan by two months, a request that threatens to delay Detroit’s emergence from bankruptcy court.
Bond insurer Syncora Guarantee Inc., Oakland County, and other creditors asked U.S. Bankruptcy Judge Steven Rhodes on Wednesday to delay the July 24 trial until mid-September.
The creditors argue Detroit has delayed turning over documents and that they need more time to prepare for trial. The new proposed trial date is Sept. 18 and will determine whether Rhodes approves the city's debt-cutting plan.
That proposed date threatens to extend the biggest municipal bankruptcy case in U.S. history. Emergency Manager Kevyn Orr has said he wants the bankruptcy case resolved before his appointment ends Sept. 30 but that goal could be in jeopardy if Rhodes approves the new trial date.
Facing hundreds of millions in potential losses, bond insurance giants Syncora and Financial Guaranty Insurance Company have been pushing for a sale of city-owned art at the Detroit Institute of Arts, which Orr has resisted.
The bond insurers contend more money could be extracted from the DIA than the $466 million private foundations and the DIA have offered over 20 years, coupled with a $195 million lump sum payment for Detroit pensioners.