The international bond insurer that subpoenaed information from the Detroit Institute of Arts and the Michigan Attorney General has been busy with court filings during the last week in the Detroit bankruptcy case.
Syncora Holdings Ltd. and its two subsidiaries are challenging the court’s approaching deadline for objections to the city’s Plan of Adjustment and Disclosure Statement. Judge Steven Rhodes extended his original April 1 deadline to April 3 after the city announced it would file its revised documents on March 31. Syncora argues it needs time beyond the April 3 deadline to file objections based on what new information the city provides.
“The Disclosure Statement references Plan exhibits as well as many other documents which inform the treatment and other rights of creditors under the Plan that are completely missing,” Syncora attorneys say in arguing for the extension. “And now, as a result of the City’s … motion, parties in interest will only have 48 hours to digest and object to the amended (i.e. new) Disclosure Statement.”
The city objected to Syncora’s request, writing “Although it dresses up its request for relief as a plea for the preservation of due process, Syncora merely seeks more disruption and delay. While this may be consistent with the scorched earth litigation strategy Syncora has adopted…it is inconsistent with the state purpose of the Court’s” order.
Syncora, based in Bermuda, also has asked Judge Rhodes to delay the scheduled April 3 hearing on the $85 million pension interest rate swaps settlement. Rhodes will consider both requests at an April 2 hearing.
Meanwhile, a group of European and American bond insurers filed in support of Syncora’s motion for the extension related to the Plan of Adjustment and Disclosure Statement, calling it “an eminently reasonable request” and saying:
“the situation and any delay in the plan confirmation process that may result is one of the City’s own making. It appears likely that the amended disclosure statement will contain hundreds of additional pages that the City could have provided when it initially filed the Disclosure Statement in February and most of which have nothing to do with intervening settlements.”
Michigan Council 25 of the American Federation of State, County & Municipal Employees also supports Syncora’s request for the extension, according to a Monday court filing.
“The City has spent over 30 days revising, modifying, and materially changing aspects of the Disclosure Statement and Plan, and intends to ‘spring’ what will undoubtedly be a materially revised Disclosure Plan likely less than 72 hours prior to the new Disclosure Statement objection deadline,” the union’s attorneys wrote. “AFSCME intends to continue on the dual path of negotiation and the Plan confirmation adversarial process, but simply seeks the due process that all parties to these proceedings — particularly City employees that face the harshest possible result in the event of a confirmed cramdown Plan in this case — deserve.”