Detroit hearing on $85 million settlement approval pushed to April 11

By Kali Hays

New York, April 3 - The City of Detroit's hearing on the approval for its proposed $85 million settlement and plan support agreement between the city, UBS AG and Merrill Lynch Capital Services, Inc. has been adjourned to April 11, according to an April 3 notice filed with the U.S. Bankruptcy Court for the Eastern District of Michigan.

As previously reported, the proposed settlement resolves all claims related to the parties' pension swaps arrangements.

Kevyn Orr, Detroit's emergency manager, said that the settlement will save taxpayers $201 million.

In addition to these savings, the definitive agreement provides for UBS and Merrill Lynch, upon payment of the settlement amount, to release their claims on casino tax and development revenue that the city had pledged as collateral for the swaps arrangement.

During the term of the definitive agreement, which is retroactive to Jan. 1, Detroit will pay down the $85 million by continuing to make its regular quarterly payments under the collateral agreement to UBS and Merrill Lynch. Any remaining amount will be paid on the effective date of a plan of adjustment or upon securing financing after the effective date.

In the settlement UBS and Merrill Lynch also will agree to vote their class of claims in support of the city's plan of adjustment.

Detroit filed bankruptcy on July 18, 2013 under Chapter 9 case number 13-53846.

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