UNITED STATES: ‘ Attorney for Detroit City’s Bankruptcy Trial Begins With His Opening Statement Discussing Debt-Restructuring Program Without Discrimination Against Creditors’

#AceFinanceNews – UNITED STATES (Detroit) – September 03 – An attorney for Detroit concluded his opening statement Wednesday in the city’s bankruptcy trial by saying the debt-restructuring plan focused first on resolving a dire financial situation and does not discriminate against creditors.

​But an attorney for the most vocal of the opposing creditors said the plan of adjustment – Detroit’s blueprint for emerging from the largest municipal bankruptcy in U.S. history – is unfair for financial creditors.

The trial’s second day began with attorney Bruce Bennett telling federal Judge Steven Rhodes that the plan, put together by state-appointed emergency manager Kevyn Orr and his restructuring team, has to be followed in order for Detroit to be stronger and viable.

"The city did all of this with the proper purpose of restructuring its financial affairs," Bennett said, adding, "The facts will show Detroit has earned this court help."

Detroit wants to cut $12 billion in unsecured debt to about $5 billion through its plan of adjustment, which must be approved by Rhodes. Most creditors, including more than 30,000 retirees and city employees, have endorsed the plan of adjustment.

Syncora Guarantee is not one of those creditors. The New York-based bond insurer’s attorney, Marc Kieselstein, said the city’s plan is "so flawed in its structure, so dismissive of basic fiduciary duties and so lacking in evidentiary support that it cannot be confirmed without doing serious mayhem to the rule of law."

Source:

Here we go. The long-awaited bankruptcy trial in federal court to decide on the validity of the city’s plan to correct its disastrous financial situation and right the ship begins today at the courthouse in downtown Detroit.

Chad Livengood of The Detroit News reports that a key component to the city’s plan is the "grand bargain." Livengood describes it as "the linchpin of the city’s plan to dump $7 billion in debt in bankruptcy court — will be put to the test in a long-awaited trial set to begin today in federal court."

He notes that two very disgruntled financial insurance companies, Syncora Guarantee Inc. and Financial Guaranty Insurance Co., the backers of $1.4 billion in troubled pension debt the city wants to expunge from its books, could be ruined if the plan goes through as is. The News reported over the weekend that Syncora was in talks with the city attorneys about possibly taking Detroit real estate, including the city airport, to satisfy its debt.

Source:

#AFN2014

BRUSSELS: ‘ German Minister Warns EU Farmers Not to Expect Full Compensation Over Russian Import Ban ‘

#AceFinanceNews – BRUSSELS – September 03 – German agriculture minister Christian Schmidt warned Tuesday that European farmers hit by a Russian import ban should not expect full compensation for their losses EUobserver reported.

The German spoke to press ahead of meeting his French and Polish colleagues in preparation of an EU agriculture ministers meeting in Brussels on Friday.

#AFN2014

BRUSSELS: ‘ Either OR Situation – Letter to UK’s Treasury Minister States Scottish Governments Plan to Keep Sterling Would be Incompatible with EU Membership ‘

#AceFinanceNews – BRUSSELS – September 03 – An independent Scotland would have to choose between using the pound and joining the EU, the bloc’s former economic affairs commissioner has said quoted in EUobserver today.

In a letter to the UK’s treasury minister Danny Alexander released on Tuesday night (2 September), two weeks before Scotland’s four million voters decide whether to leave the UK, Olli Rehn stated that the Scottish government’s plan to keep sterling without a formal currency union with London would be incompatible with EU membership.

"As to the question of whether ‘sterlingisation’ were compatible with EU membership, the answer is that this simply would not be possible, since that would obviously imply a situation where the candidate country concerned would not have a monetary authority of its one, and thus no necessary instruments for EMU," he wrote.

The question of whether Scotland could continue to use the British pound as its currency has been one of the key arguments during the campaign.

#AFN2014