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The Detroit Journalism Cooperative is an integrated community media network providing insight on the issues facing Detroit. It features two radio stations, an online magazine, five ethnic newspapers, and a public television station-- All working together to tell the story of Detroit.The DJC includes Michigan Radio, Bridge Magazine, Detroit Public Television, WDET, and New Michigan Media. To see all the stories produced for the DJC, visit The Intersection website.Scroll below to see DJC stories from Michigan Radio and other selected stories from our partners.

In bankruptcy breakthrough, Detroit reaches deal with its fiercest creditor foe

Paul Hitzelberger
United Photo Works

Detroit has hammered out a deal with its fiercest foe in bankruptcy court, possibly smoothing the way for the city to leave bankruptcy quickly.

Bond insurer Syncora Guarantee, Inc. had fought the city’s proposed plan of adjustment at every turn.

That restructuring plan would have forced the company to take hundreds of millions of dollars in losses.

But the two sides appear to have reached a somewhat complicated package deal Tuesday evening. Details won’t be confirmed until Wednesday morning, but according to the Detroit Free Press:

·        Syncora is promised an additional $23.5 million in bond payments.

·        Syncora already owns the company that leases and operates the Detroit portion of the Detroit-Windsor tunnel. The current lease expires in 2020; this deal would extend it to 2040.

·        Syncora gets a long-term lease on a city-owned parking garage in the heart of downtown Detroit.

·        Syncora gets $6.2 million in real estate credits that can be used to bid on city-owned properties coming up for sale.

Judge Steven Rhodes will need to approve the tentative deal.

The city just wrapped up day six of a trial to decide the plan of adjustment’s fate. If Rhodes OK’s the Syncora deal, it would speed up the trial and let Detroit exit bankruptcy faster.

It could also encourage the few other holdout creditors to reach deals, and potentially allow for a consensual resolution to the entire bankruptcy — something few people thought possible.

Most experts expected the case to be resolved by a “cramdown,” where the judge approves a bankruptcy plan over the objections of dissenting creditors.

Syncora lawyers have asked Judge Rhodes for a 48 hour delay in the trial to finalize details of the agreement with the city.

Sarah Cwiek joined Michigan Public in October 2009. As our Detroit reporter, she is helping us expand our coverage of the economy, politics, and culture in and around the city of Detroit.
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