Judge approves Detroit swaps deal with 2 banks - KMSP-TV

Judge approves Detroit swaps deal with 2 banks

Posted: Updated:
DETROIT (AP) -- A federal judge on Friday approved bankrupt Detroit's plan to settle a bad multi-million dollar pension debt deal with two banks.

Judge Steven Rhodes signed off on the agreement to pay $85 million to UBS and Bank of America.

"The amount is reasonable and quite fairly compromises the counter-parties' claims," the judge said of the deal in which each bank will get $42.5 million secured from casino revenue.

It will be paid off in monthly, $4.2 million installments, Rhodes said during a hearing Friday morning.

Rhodes said the plan decreases the amount Detroit owes to the banks and extends the amount of time the city has to pay what is owed. Plus, it doesn't need a loan to pay it off, he said.

Rhodes had denied earlier proposals for $220 million and $165 million settlements.

Detroit had pledged casino tax revenue in 2009 as collateral to avoid defaulting on pension debt payments, which allowed the city to get fixed interest rates on pension bonds with the banks. But the deal became too costly when interest rates plunged.

The swaps deal is key to Orr's plan to restructure Detroit's debt. The two banks have said they will support Orr's plan.
  • Local NewsLocal NewsMore>>

  • Howell man fatally shot in alleged road rage incident

    Howell man fatally shot in alleged road rage incident

    Tuesday, September 2 2014 5:08 PM EDT2014-09-02 21:08:21 GMT
    A 43-year-old Howell man was fatally shot at Chilson and Grand River in Genoa Township Tuesday afternoon. According to police, an alleged road rage incident led to the shooting.
    A 43-year-old Howell man was fatally shot at Chilson and Grand River in Genoa Township Tuesday afternoon. According to police, an alleged road rage incident led to the shooting.
  • Detroit police seek missing Amber Smith, 29

    Detroit police seek missing Amber Smith, 29

    Tuesday, September 2 2014 1:18 PM EDT2014-09-02 17:18:21 GMT
    Detroit police are asking for the public's help locating 29-year-old Amber Smith.
    Detroit police are asking for the public's help locating 29-year-old Amber Smith.
  • YOUR PHOTOS: First day of school 2014

    YOUR PHOTOS: First day of school 2014

    Tuesday, September 2 2014 11:08 AM EDT2014-09-02 15:08:59 GMT
    It's back to school day!Many kids are heading back to school today. Is yours? We'd love to see your Back to School photos.
    It's back to school day!Many kids are heading back to school today. Is yours? We'd love to see your Back to School photos.
  • Download the FOX 2 Apps


  • FOX 2 News Five-Day Forecast
Powered by WorldNow

KMSP-TV
11358 Viking Drive
Eden Prairie, MN 55344

Phone: (952) 944-9999
Fax: (952) 942-0455

Didn't find what you were looking for?
All content © Copyright 2000 - 2014 Fox Television Stations, Inc. and Worldnow. All Rights Reserved.
Privacy Policy | New Terms of Service What's new | Ad Choices