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 a Child Turns 18: The Gap in Your Family’s Estate Plan
Once a child turns 18, parents lose the automatic legal authority to make medical and financial decisions on their behalf, even if the child still lives at home or remains on the family’s insurance. Three documents close that gap: a durable power of attorney, a health care proxy or directive, and a HIPAA authorization. For […]
Author: George McGowan
Business Mediation: An Overview and Practical Tips
Business mediation is a confidential, voluntary process in which a neutral third party helps companies negotiate a resolution to a commercial dispute without going to trial. Because working with a mediator is very different from litigating in the courtroom, it is important to understand how commercial mediation works, when it makes sense for your dispute, […]
Author: Paul Grossman
Top 5 Causes Leading to Construction Defect Litigation
The five most common causes of construction defect litigation are design defects, substandard materials, workmanship defects, code violations, and subsurface defects. Because these flaws can compromise a building’s integrity, functionality, or safety, they frequently lead to disputes involving multiple parties and high financial stakes. Key takeaways: What is Construction Defect Litigation? Construction litigation is complex, […]
Author: Paul Grossman
How to Protect Your New Jersey Business When Going through a Divorce
The most effective ways to protect your business in a divorce are put in place before one begins: a prenuptial or postnuptial agreement, clean separation of business and personal finances, and divorce contingencies built into your operating or buy-sell agreements. If divorce is already underway, the priorities shift to establishing how the business is classified […]
Author: Jay McDaniel
10 Common Issues in Franchise Disputes
The most common franchise disputes involve breach of contract, franchise termination and non-renewal, intellectual property rights, territorial encroachment, royalty and fee payments, franchisor support obligations, and violations of state franchise laws such as the New Jersey Franchise Practices Act. Franchisors and franchisees can often resolve these conflicts by providing written notice detailing the dispute and […]
Author: Paul Grossman
Reputational Risk and Legal Exposure: Why New Jersey Businesses Must Manage Them Together
New Jersey businesses must manage legal and reputational risk together because modern disputes play out on two fronts at once: the legal proceeding itself and the court of public opinion, where customers, employees, investors, and business partners often reach conclusions long before a judge or jury has had the opportunity to evaluate the facts. Success […]
Author: Sean M. Pena
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.