Detroit Bankruptcy Trial on Hold Amid Possible Deal

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/ Source: Associated Press

A judge on Wednesday suspended Detroit's bankruptcy trial until next week to give lawyers time to work out the details of a settlement that would satisfy a major creditor that opposed the city's plan to get on its feet again. The city reached a deal Tuesday with Syncora, a bond insurer that stood to lose about $400 million under Detroit's plan to get out of bankruptcy. Detroit would extend Syncora's lease on a tunnel between the U.S. and Canada and grant it a long-term lease on a downtown parking garage, among other concessions.

Syncora would recover roughly 26 percent of its claim, spokesman Steven Schlein told The Associated Press. The deal shows how fortunes can quickly change in bankruptcy, even in the middle of trial. Judge Steven Rhodes must decide whether Detroit's plan is fair to creditors and feasible for the long run. "It's always better to be loving rather than fighting," Syncora attorney Stephen Hackney said outside court. Syncora is one of many creditors in the case, but it has been one of the loudest.


-- The Associated Press