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Detroit Offers Judge Bus Tour While Insurers Fight Debt Suit

A bond insurer wants the chance to fight Detroits effort to cancel $1.4 billion in pension debt, while the city is asking a judge to take a bus tour of its blighted areas before ruling on its $18 billion bankruptcy plan.

By Steven Church, Bloomberg | Updated on May 19, 2014

(Bloomberg) — A bond insurer wants the chance to fight Detroit’s effort to cancel $1.4 billion in pension debt, while the city is asking a judge to take a bus tour of its blighted areas before ruling on its $18 billion bankruptcy plan.

The insurer, Financial Guaranty Insurance Co., along with investors who would be wiped out by the plan, wants to take part in a lawsuit Detroit filed to cancel the debt, which was issued in 2005 and 2006 to prop up public worker pensions. FGIC and the investors claim that a trustee now opposing the suit won’t represent their interests adequately.

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