Detroit Bankruptcy Update: Settlements and Feasibility

By J. Ellsworth Summers, Jr. and Scott St. Amand

In Detroit’s ongoing restructuring effort, the city cleared a major hurdle last week by settling with its largest adversary, Syncora Guarantee, a New York based bond insurer. The settlement was negotiated just a week into the bankruptcy trial and was so significant that Judge Steven Rhodes adjourned the trial for two days to allow the parties to work out the logistics of the deal. Although the Syncora settlement was a huge step in the right direction for the beleaguered municipality, Detroit still faced a vexing requirement of the Chapter 9 process: feasibility.