Detroit End in Sight as Deals Leave FGIC Last Major Bankruptcy HoldoutSeptember 12, 2014 – In The News
Michael A. Sweet was quoted in the Reuters article, “Detroit End in Sight as Deals Leave FGIC Last Major Bankruptcy Holdout.” Full text can be found in the September 12, 2014, issue, but a synopsis is below.
The pressure is now on Financial Guaranty Insurance Co. (FGIC), the last major holdout creditor in the Detroit bankruptcy, as the city continues to reach settlements with other creditors.
A deal reached earlier this week with another major creditor, coupled with deals with pension funds, unions, retirees and some bondholders could mean FGIC missed its opportunity to recoup a significant portion of the more than $1 billion it has on the line from insuring the city’s debt.
“It will be very hard for (FGIC) to remain on the outside looking in,” said Michael Sweet. “Whatever pressure they were feeling before this settlement was reached will certainly become greater. (The settlement earlier this week by another major creditor) reduces the risk that the plan would not be confirmed even if FGIC doesn't settle.”