Detroit bankruptcy breakthrough: City hammers out deal with unsecured bondholders
Source: Detroit Free Press
The City of Detroit plans to reveal as soon as Wednesday that it has reached a bankruptcy settlement with unsecured bondholders, reflecting a key resolution to one of the case’s most contentious issues, sources familiar with the plans said.
The sources declined to be named because the results of mediation talks aren’t supposed to be publicly disclosed out of court.
Terms of Detroit’s settlement with insurers of general obligation bondholders were not available, but the deal could make it easier for the city to force other unsecured creditors —including pensioners —to accept cuts.
By reaching a deal to pay bondholders less than they are owed, Detroit will also have more cash to pay other creditors and more money to reinvest in city services after it emerges from Chapter 9 bankruptcy.
Read more: http://www.freep.com/article/20140408/NEWS01/304080142/Detroit-bankruptcy-breakthrough-City-hammers-out-deal-unsecured-bondholders