In a 60-page briefing filed this afternoon, bond insurer Syncora called the Detroit bankruptcy’s grand bargain “fraudulent,” and attacked the court mediators who helped craft it, including Chief U.S. District Court Judge Gerald Rosen.
The grand bargain, Syncora argues, gives illegal, favorable treatment to one group of the city’s creditors — the pensioners — as they are the only creditors who benefit from the grand bargain’s $660 million in state and private money. Syncora also objects to the city retaining the Detroit Institute of Art collection instead of selling it to pay at least part of its $18 billion debt.
“The plain truth is that the mediators in this case acted improperly by orchestrating a settlement that alienates the City’s most valuable assets for the sole benefit of one creditor group,” Syncora attorneys write. “Moreover, if approved, the DIA Settlement will in essence give rise to a judicially sanctioned, fraudulent transfer.”
Syncora stands to lose about $400 million in the bankruptcy case, and has objected at many turns of the 13-month-old case. (Incidentally, Syncora’s latest objection cites as a source a NextChapterDetroit.com post, “Detroit’s Chief Mediator: Judge Gerald Rosen speaks about the bankruptcy process:.)