Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Detroit Close To A Deal With Final Creditor
Author: Joel R. Glucksman
Date: October 17, 2014
Key Contacts
Back
The city of Detroit appears to be approaching a deal with its largest and last holdout creditor, Financial Guaranty Insurance Co.
City attorneys said that they hope to present a settlement in U.S. Bankruptcy Court on Oct. 16 after negotiations with FGIC, according to The Detroit News. Thomas Cullen, a Jones Day attorney who is representing Detroit, described a “firm and active faith” that the city and its holdout creditor will have finalized a deal by that time.
Alfredo Perez, an attorney for FGIC, told Bankruptcy Judge Steven Rhodes that “a lot of progress” has been made in recent closed-door negotiations out of court, the news source reported. FGIC holds a $1.1 billion claim that resulted from a pension deal backed by former Mayor Kwame Kilpatrick. The deal reached with this creditor could involve leases on three parking garages in the city, riverfront land, cash and a development deal on city-owned land.
Before this deal, FGIC faced recovering just 6 percent of its holdings compared to the 46 percent recovered by pensioners’ claims, according to The Detroit News. The creditor has maintained that this amounts to unfair treatment, but may be motivated to take any deal that offers better terms than this.
“Mediation with FGIC is progressing but the City is reserving any comment until there is a signed memo of understanding between parties,” Bill Nowling, a spokesman for Detroit Emergency Manager Kevyn Orr, said in a statement, according to The Wall Street Journal. “All I will say is that both sides are close to an agreement.”
The news source explained that this deal could help to end the city’s long trip through bankruptcy court, allowing it to discharge as much as $7 billion of the $18 billion that it owes. Most creditors, including the pensioners, have already settled with the city, and sources told the Journal that Detroit hopes to conclude the case by as early as Thanksgiving.
- Practices: Corporate Transactions & Business
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
When to Settle and When to Fight: A Litigator's Framework
Every lawsuit comes with a cost, and knowing when to settle a lawsuit is one of the most consequential decisions a business owner will face. Experienced litigators understand how to minimize cost and obtain certainty for their clients. For many business owners, the decision is viewed almost entirely through a financial lens: What will it cost […]
Author: Sean M. Pena
A Whistleblower Just Filed a Complaint Against Your Company: Here's What to Do Now
Few situations create more uncertainty than learning that an employee has filed a whistleblower complaint. Questions arise immediately: Is the allegation legitimate? Should the employee be placed on leave? Do we need to notify our insurance carrier? Are we now prevented from disciplining the employee if there are unrelated ongoing work related issues? There is […]
Author: Sean M. Pena
Assignment for the Benefit of Creditors: An Alternative to Bankruptcy for Distressed Businesses
When a business reaches the point where it can no longer service its debts or otherwise resolve its liabilities, management is often faced with a difficult question: is a bankruptcy filing necessary or is there another way to perform an orderly liquidation or sale of the business assets? While Chapters 7 and 11 of the […]
Author: John D. Giampolo
Breaking Down New Jersey’s “Mansion” Tax: What Buyers and Sellers Need to Know
For many years, the New Jersey Mansion Tax has been a significant consideration in high-value real estate transactions. Recent legislative changes, however, have substantially altered how the tax operates, including who is responsible for paying it and the amount owed in certain transactions. Whether you are purchasing, selling, or investing in New Jersey real estate, […]
Author: George McGowan
Estate Planning for Digital Assets Under New Jersey Law
As our personal and financial lives increasingly move online, estate planning must evolve to address a new category of property: digital assets. From email accounts and social media profiles to cryptocurrency and cloud-stored business records, these assets often carry both financial and sentimental value. Yet, without proper planning, they can become inaccessible—or even lost—upon incapacity […]
Author: Marc J. Comer
The Role of Representation and Warranty Insurance in M&A Transactions
In today’s mergers and acquisitions market, representation and warranty (R&W) insurance has become a common feature of deal negotiations. Once used primarily in larger transactions, R&W insurance is now frequently incorporated into middle-market deals as buyers and sellers look for efficient ways to allocate risk and close deals. When structured properly, R&W insurance can help […]
Author: George McGowan
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.