Detroit bankruptcy judge rejects deal with banks

Jan 16, 2014

Credit Michigan Radio


Judge Steven Rhodes turned down a more than $165 million compromise, saying "it's just too much money," about 67 cents on every dollar owed to the banks as of Dec. 31. He had rejected a $230 million deal in December.

He encouraged the city and banks to keep negotiating. After making his decision, he cleared the courtroom to talk privately to lawyers.

Reaching an agreement is considered a key step as the city comes up with a sweeping plan to exit bankruptcy.

Two judges who acted as mediators in the deal, Detroit Chief U.S. District Judge Gerald Rosen and Oregon U.S. Bankruptcy Judge Elizabeth Perris, had endorsed it last month.



Detroit had lined up a loan to pay for the settlement.





