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
What Every Real Estate Investor Should Know Before Buying a Rental Property
Before buying a New Jersey rental property, an investor should verify realistic operating numbers, the property’s legal and regulatory status, lead-based paint and flood compliance, the existing leases and tenant protections, and the right ownership structure. A rental property is more than a piece of real estate; it is an operating business subject to legal, […]
Author: Donald M. Pepe
Can You Change an Irrevocable Trust in New Jersey?
In New Jersey, an irrevocable trust can sometimes be modified even though its name suggests otherwise, and one of the primary tools for doing so is a process called decanting. Whether decanting is available depends on the specific terms of the trust and the discretion given to the trustee. Key takeaways: New Jersey has no […]
Author: Marc J. Comer
How Intellectual Property Valuation Will Impact Business Transactions
Intellectual property valuation determines the monetary value of a business’s IP assets, and it drives outcomes in licensing deals, joint ventures, mergers and acquisitions, financing, and ownership disputes. The most valuable assets of a business are often the things that cannot be seen or touched: a proprietary process, a copyrighted work, brand recognition, or the […]
Author: Jay McDaniel
Data Center, Dark Fiber, and Lit Services Agreements in New Jersey: Key Terms and Legal Pitfalls
For New Jersey data center owners and operators, a service agreement may look routine when it is signed. The network is functioning, the vendor is meeting its installation schedule, and the parties have agreed on pricing and performance specifications. The provisions that seem most important at that stage are often the technical ones. That changes […]
Author: George McGowan
Fort Monmouth Redevelopment and the Transformation of Monmouth County Real Estate
The Fort Monmouth redevelopment has entered its execution phase, and it is repositioning the broader Monmouth County real estate market. When Netflix and the Fort Monmouth Economic Revitalization Authority closed on the 292-acre Mega Parcel in December 2025, the transaction did more than hand over a deed. It marked the moment Fort Monmouth stopped being […]
Author: Donald M. Pepe
Local Zoning and Land Use Rules Every New Jersey Rental Property Owner Should Understand
Owning a residential rental property in New Jersey involves more than finding tenants and collecting rent. Property owners must comply with a combination of state laws, municipal ordinances, building and housing codes, and zoning and land use regulations. These requirements can affect everything from the number of dwelling units permitted at a property to whether […]
Author: Donald M. Pepe
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.