Detroit Bankruptcy Judge Denies Proposal To Pay Off Disastrous Debt Deal

[Purveyor]

Source: Detroit Free Press

U.S. Bankruptcy Judge Steven Rhodes today denied the City of Detroit’s proposal to pay off a disastrous debt deal originating in 2005, saying it’s “reasonably likely” the city would succeed in challenging the transaction.

Rhodes said the city must stop making poor financial decisions, and it’s his judicial responsibility to ensure it emerges from Chapter 9 bankruptcy as a financially sustainable municipality.

“The court ... will not participate in or permit the city to perpetuate the very kind of hasty and imprudent financial decision-making that led to the” original deal, Rhodes said in a verbal ruling this afternoon.

The ruling dealt a stunning blow to global banks UBS and Bank of America Merrill Lynch, which had agreed to accept $165 million to settle the so-called “swaps” deal.

Read more: http://www.freep.com/article/20140116/NEWS01/301160104/detroit-bankruptcy-swaps-ruling

[malthaussen]

1. Yay, Judge! Yay, Judge!

Now, there's a decision positively reeking with disdain.

-- Mal

[madrchsod]

3. yes it is...

i have been in front of a bankruptcy judge several times. they are hard nosed and go by the book. this judge did exactly what his he was supposed to do. it`s interesting that the guys who want to liquidate detroit didn't realize only the judge can allow them to do that.

[malthaussen]

4. Typical, really.

Their Congressional equivalents don't even know the rules for passing a law. These people really have no understanding of the law, and that is where they are going to be defeated. They can try whatever tricks they want, but the Court will have its say. And they haven't subverted all of the courts yet.


-- Mal

[another_liberal]

2. The City is bankrupt, but the banks still get one hundred sixty-five million?

Screw-over the retirees and their pensions, but pay the banksters? Now we know why that emergency manager was appointed.