The Craig Fahle Show

What the Swaps Deal Approval Means for Pensioners

Monday, April 14, 2014





Sketch by Jerry Lemenu

After US Bankruptcy Court Judge Steve Rhodes' ruling approving the $85 million swaps deal from the bench Friday, Sandra Svoboda explains how this deal could affect pensioners and the plan of adjustment.

Part of this agreement included the banks agreeing to vote in favor of the plan of adjustment. Svoboda says this may help "cram down" the plan on pensioners.

Another plan of adjustment is due to be released today, detailing the final numbers.

HISTORY OF THE SWAPS SETTLEMENT

This case dates back to deals made by Kilpatrick administration securing 1.4 billion for pension funding. The city then borrowed from UBS and Bank of America to pay for the remaining balance of $300-400 million. When the bankruptcy was filed, the city still owed the two banks $280 million. The settlement which was approved Friday established a payment of $85 million to UBS and Bank of America or 30 cents on the dollar.

THIS WEEK IN BANKRUPTCY COURT

Thursday, April 17

A hearing on the contents of the ballot for pensioners and voting procedures.





Find more coverage of Detroit's bankruptcy and its impact on people and neighborhoods on WDET's Next Chapter Detroit blog.

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