Judge Steven Rhodes
If this were a movie, we'd already be on fifth or sixth sequel of "Detroit Bankruptcy," and we'd be pretty tired of it by now.
In the latest script, U.S. District Judge Steven Rhodes was irked Thursday that an $85 million settlement had not been finalized for his approval. The settlement would resolve a disastrous pension-related debt deal that could let Detroit force cuts on creditors, Robert Snell of The Detroit News writes. The deal represents a payment of 30 cents on the dollar, far less than the 75 cents Detroit Emergency Manager Kevyn Orr initially proposed.
City lawyers want Rhodes to approve the deal, but said it wouldn't be finalized until Wednesday.
The proposed settlement would save taxpayers $201 million and give the city a partner to force other creditors to take $9 billion in cuts, Snell writes.
During a brief hearing Thursday, Rhodes questioned why Detroit didn’t finalize the deal before asking him to approve it.
The Detroit News reported in an exchange between the judge and bankruptcy lawyer Robert Hertzberg:
“We believe we had an agreement. A term sheet is an agreement,” Detroit bankruptcy lawyer Robert Hertzberg told the judge Thursday.
“It’s not a term sheet you’ve asked me to approve, it’s an agreement not yet done,” the judge said.
“I’ve done this many times,” Hertzberg said.
“That doesn’t make it right,” the judge said.
“I assure the court the settlement agreement will read the same as the motion we filed,” the lawyer said.
“Why wasn’t it already done?” Rhodes asked.
“It’s been a struggle,” the lawyer said, “a lengthy negotiation.”
“It’ it’s been a struggle, how can I accept your assurance that it will be done on any date?” the judge asked.
“We are close to finalizing everything,” Hertzberg said. -- A.L.
