August 6, 2014 at 4:47 pm

Detroit bankruptcy judge: No more delays for debt-cutting trial

Rodin's 'The Thinker' sits out front of the Detroit Institute of Arts. (Brandy Baker / The Detroit News)

Detroit — The city’s bankruptcy judge Wednesday refused to delay an Aug. 21 trial that will determine the feasibility of Detroit’s debt-cutting plan.

U.S. Bankruptcy Judge Steven Rhodes, who earlier delayed the trial from last month, said he would keep an open mind but wants to start a trial in two weeks that will determine whether Detroit can dump about $7 billion in debt. Bond insurer Syncora Guarantee Inc., one of the city’s last holdout creditors, had pushed for a delay, complaining that the city missed deadlines to turn over key documents.

Earlier Wednesday, Toyota pledged $1 million toward the grand bargain Wednesday, the cornerstone of Detroit’s bankruptcy plan that would shield the city’s art collection from creditors and bolster pensions.

The pledge comes two months after Detroit’s Big Three automakers pledged $26 milliontoward the grand bargain.

Toyota’s money will go toward the $100 million the Detroit Institute of Arts needs to raise for the grand bargain. So far, the DIA has announced about $80 million in pledges toward the $100 million goal.

“Detroit and the surrounding areas are vitally important to the automotive community. They deserve our support,” Simon Nagata, president of Toyota Motor Engineering and Manufacturing, Inc., said in a prepared statement.

“Together, we can find solutions to help Detroit become the healthy and vibrant community that reflects the spirit of its people. Our pledge is a way to demonstrate our gratitude to the people who have built this industry and support us every day.”

The grand bargain calls for $466 million in private funding and $195 million in state tax dollars to limit pension cuts for 32,000 past and present Detroit workers.

After Detroit’s Big Three made its contributions, Nagata said he had serious discussions with his own teams as to how Toyota could contribute money.

“We appreciate the benefits we have been receiving from this community,” he said in an interview Wednesday. “I have been wondering what kind of contribution or support Toyota could do for the people of the city of Detroit.”

He said he visited the DIA’s Samurai exhibit in March and was impressed.

“The DIA is a very, very important cultural asset not only for the city of Detroit but for many people in southeast Michigan,” he said.

Nagata said he thinks Toyota’s investment could spur others in the auto industry to follow suit.

“Perhaps there may be more companies, some tier-one suppliers, doing a similar contribution to what we did,” he said.

“Toyota has demonstrated its commitment to Detroit and Michigan by doing its part to secure the DIA’s future while helping Detroit’s retirees,” DIA board Chairman Eugene Gargaro Jr. said in a statement.

A group of businesses and leaders have pledged $26.8 million. The group includes Penske Corp., DTE Energy Co., Quicken Loans and Rock Ventures, Blue Cross Blue Shield of Michigan and others.

Ford Motor Co., through its charitable foundation, has agreed to contribute $10 million. General Motors Co. has pledged $5 million, as well as another $5 million from the General Motors Foundation. Chrysler Group LLC has committed $6 million.