DETROIT – A major Detroit creditor is objecting to the bankrupt city’s debt restructuring plan, saying it should be scrapped before trial.
Bond insurer Syncora Guarantee says in a court filing Tuesday that the plan will be costly to defend and fail in court.
The trial for the largest municipal bankruptcy in U.S. history is set to start Aug. 21.
Syncora is challenging a court-mediated agreement between the state, corporations and foundations that promises $800 million for pensions while staving off the sale of city-owned art to satisfy creditors.
Syncora’s claim is about $400 million. Its objection says mediators “acted improperly by orchestrating a settlement that alienates the city’s most valuable assets for the sole benefit of one creditor group.”