Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comObjections Submitted Over Detroit Bankruptcy Plan
Author: Joel R. Glucksman|May 29, 2014
The political disputes over Detroit’s restructuring plans were brought sharply into focus May 12, when 15 objections to the city’s debt adjustment plan were filed in bankruptcy court.
Objections Submitted Over Detroit Bankruptcy Plan
The political disputes over Detroit’s restructuring plans were brought sharply into focus May 12, when 15 objections to the city’s debt adjustment plan were filed in bankruptcy court.
Objections were filed by creditors, residents, Oakland and Macomb counties and, most notably, by the United States government, according to MLive. The U.S. Department of Housing and Urban Development claims that Detroit owes it almost $112 million on loan guarantee contracts, but the city only acknowledges approximately $90 million of that debt. The government entered an objection in order to continue its fight over the $22 million difference.
“HUD disputes this amount and believes the aggregate amount of unpaid principal and interest on the Loan Guarantee Contracts is $111,959,163.90, as stated above,” federal lawyers wrote in the filing, according to the news source. “HUD has provided the debtor with this amount as well as the supporting evidence for it and discussions between the debtor and HUD are ongoing. To date, however, the debtor has not yet agreed with HUD’s figure, and HUD therefore files this objection to preserve its right to contest the claim amount stated in the plan.”
The objections by Oakland and Macomb counties also have the potential to disrupt proceedings. According to The Detroit Free Press, the counties are protesting the city’s intention to spin off its water department. Macomb County suggested that the move could cause rates to rise, while Oakland County accused emergency manager Kevyn Orr and his team of putting the water and sewage systems at risk.
Despite these objections, Detroit already has deals with retiree groups that have pledged to recommend a “yes” vote to their members, according to the news source. This alone may provide Orr’s team with the momentum needed to push the restructuring plan through bankruptcy court.
Objections Submitted Over Detroit Bankruptcy Plan
Author: Joel R. Glucksman
Objections were filed by creditors, residents, Oakland and Macomb counties and, most notably, by the United States government, according to MLive. The U.S. Department of Housing and Urban Development claims that Detroit owes it almost $112 million on loan guarantee contracts, but the city only acknowledges approximately $90 million of that debt. The government entered an objection in order to continue its fight over the $22 million difference.
“HUD disputes this amount and believes the aggregate amount of unpaid principal and interest on the Loan Guarantee Contracts is $111,959,163.90, as stated above,” federal lawyers wrote in the filing, according to the news source. “HUD has provided the debtor with this amount as well as the supporting evidence for it and discussions between the debtor and HUD are ongoing. To date, however, the debtor has not yet agreed with HUD’s figure, and HUD therefore files this objection to preserve its right to contest the claim amount stated in the plan.”
The objections by Oakland and Macomb counties also have the potential to disrupt proceedings. According to The Detroit Free Press, the counties are protesting the city’s intention to spin off its water department. Macomb County suggested that the move could cause rates to rise, while Oakland County accused emergency manager Kevyn Orr and his team of putting the water and sewage systems at risk.
Despite these objections, Detroit already has deals with retiree groups that have pledged to recommend a “yes” vote to their members, according to the news source. This alone may provide Orr’s team with the momentum needed to push the restructuring plan through bankruptcy court.
