Syncora Holdings, one of the holdout creditors in the Detroit bankruptcy filing, could face sanctions for its conduct in the case.
Judge Steven Rhodes must decide this week whether he will sanction the company or allow its objection to the so-called “grand bargain,” which is crucial to the city’s restructuring plan, according to WXYZ. Syncora is a bond insurer, and stands to lose hundreds of millions in the bankruptcy.
Syncora lawyers stated that the mediators in the Detroit bankruptcy gave “naked favoritism” to the city’s pensioners and the Detroit Institute of Arts over them and other financial creditors, according to the news source. The grand bargain spins off the DIA into its own separate entity. In exchange, interested parties will give $816 million to soften pension cuts for fire, police and civil retirees in the city.
In their filing, Syncora attorneys said that the grand bargain was, “the product of agenda-driven, conflicted mediators who colluded with certain interested parties to benefit select favored creditors to the gross detriment of disfavored creditors and, remarkably, the city itself,” according to The Detroit Free Press.
Experts watching the case expressed surprise that Syncora made public allegations that mediators are violating judicial codes of conduct and conspiring to achieve politically motivated goals, the news source explained. These are serious charges, and as a result, the creditors lawyers could face fines or other sanctions should Rhodes determine that the team is attempting to “sandbag” the deal.
Syncora’s interest in the Chapter 9 bankruptcy stems from a deal that it and fellow bond insurer Financial Guaranty Insurance Co. made with the city in 2005, The Free Press explained. The companies guaranteed payments on a $1.4 billion debt deal under Mayor Kwame Kilpatrick, in which the city attempted to eliminate its unfunded pension liabilities. Detroit now argues that the deal was illegal and should be discarded.
As a creditors’ rights and bankruptcy attorney, I have written about Detroit’s bankruptcy. If you want to get the full story of the current state of Motor City. Check out some of my previous posts:
Panel of Federal Judges Halts Appeals In Detroit Bankruptcy Case
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, […]
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 […]
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 […]
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 […]
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 […]
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 […]
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.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
