Detroit Judge OKs Swaps Deal But Headwinds RemainApril 11, 2014 – In The News
Michael Sweet was quoted in The Bond Buyer article "Detroit Judge OKs Swaps Deal But Headwinds Remain." While the full text can be found in the April 11, 2014, issue of The Bond Buyer, a synopsis is noted below.
U.S. Bankruptcy Judge Steven Rhodes has approved Detroit’s $85 million interest-rate swaps settlement, resolving one aspect of the city’s Chapter 9 case.
Despite last week’s victories, Detroit still faces the difficult task of reaching settlements with the creditors making up the majority of its debt: the city’s pensioners.
"While all these other settlements are significant, the pensions will be the linchpin to getting a plan that will get approval," said Michael Sweet. "The plan can still be approved without resolution, but that would make it so much easier. The most important thing that needs to happen is resolution of the pensions."
Some creditors are also seeking to force the city to consider bids for the city owned Detroit Institute of Arts museum in order to pay off debt.
According to Sweet, the fact that the art is in play is proof of the high stakes of trying to restructure the once-great American city.
"The case is really bringing a lot of tough issues to the surface," he said. "It just goes to show what a shame it was that Detroit, once of the wealthiest cities, didn't plan better as it moved into the 21st century."