Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Judge Rhodes Endorses Detroit Bankruptcy Plan
Author: Joel R. Glucksman
Date: November 27, 2014
Key Contacts
Back
Less than a year and a half after filing for protection under Chapter 9 of the bankruptcy law, the city of Detroit is ready to begin implementing its plan of restructuring.
Judge Steven Rhodes of the United States Bankruptcy Court for the Eastern District of Michigan approved the Detroit plan to cut $7 billion of its $18 billion in debt, according to The New York Times. The city will also invest approximately $1.7 billion into services to help revitalize the downtown area and stimulate economic growth. Rhodes found the plan to be fair, feasible and in the best interest of the city’s creditors – the test for a plan of restructuring.
“Getting this resolved is a huge issue in terms of creating a great environment for the city, and not just the city but for the state, to all rally on focusing on growing Detroit,” said Gov. Rick Snyder of Michigan, according to the news source. “It really takes care of the city government issue and gets a normal context to be a more traditional government structure again.”
While there is generally a 14-day period after a judge approves a plan of restructuring to allow objectors to file appeals, Detroit has asked that Rhodes waive this period to allow it to begin enacting the plan immediately, The Detroit News reported. While this would be unusual, the city has already reached mutual agreements with many of its creditors.
Rhodes noted the difficulties that would be faced as a result of the bankruptcy, particularly those of city retirees who have had their pensions reduced, according to the news source. However, he also praised some elements of the plan, including the so-called “Grand Bargain” that gives Detroit money for the pension fund in exchange for spinning off the Detroit Institute of Art into a public trust.
“To sell the DIA art would be to forfeit Detroit’s future,” Rhodes said. “The city made the right decision.”
- Practices: Corporate Transactions & Business, Bankruptcy & Creditors' Rights, Bankruptcy Litigation
- 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
Why Secured Transactions Are Important
Secured transactions form the backbone of a wide range of business dealings, including business loans, mortgages, and inventory financing. Because the stakes are often high and relatively minor oversights can have drastic consequences, lenders and borrowers should thoroughly understand how to form an enforceable security agreement that protects their legal rights. What Is a Secured […]
Author: Dan Brecher
Don’t Cash a “Paid in Full” Check Without Understanding the Legal Implications
Cashing a check marked “paid in full” can be a risky endeavor, particularly if you don’t fully understanding the legal implications. If you are owed more than the amount of the check you accept and deposit, you may waive your right to collect the full disputed amount. That is why you should consider either rejecting […]
Author: Dan Brecher
Changes to Qualified Small Business Stock Will Benefit Startup Founders and Investors
The One Big Beautiful Bill Act of 2025 (OBBBA) significantly impacts federal taxes, credits, and deductions. A key change relating to Qualified Small Business Stock (QSBS) allows greater tax-free gains for investments in startups and other qualifying small businesses. Company founders and other investors should understand how the enhanced tax strategy works or risk missing […]
Author: Dan Brecher
Corporate Consolidation and Antitrust Issues in Mergers
Corporate consolidation involves two or more businesses merging to become a single larger entity. The result is often a stronger and more competitive company that can better navigate today’s competitive marketplace. What Is Corporate Consolidation? Corporate consolidation closely resembles a basic merger transaction. The primary difference is that a consolidation creates an entirely new business […]
Author: Dan Brecher
What is Business Law and Why Is it Important?
Business law plays a critical role in nearly every aspect of running a successful enterprise, from negotiating a commercial lease to drafting employee policies to fulfilling corporate disclosure obligations. Understanding what is business law and your legal obligations can help your business run smoothly and build productive relationships with clients, business partners, regulators, and others. […]
Author: Dan Brecher
Corporate Transactions: Best Practices for Successful Deals
Corporate transactions can have significant implications for a corporation and its stakeholders. For deals to be successful, companies must act strategically to maximize value and minimize risk. It is also important to fully understand the legal and financial ramifications of corporate transactions, both in the near and long term. Understanding Corporate Transactions The term “corporate […]
Author: Dan Brecher
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.