Weather delays hearing in Detroit bankruptcy case

Weather delays closing arguments on Detroit pension debt deal with 2 banks in bankruptcy court

Associated Press

DETROIT (AP) -- Winter weather has delayed closing arguments in a bankruptcy court hearing on an agreement by Detroit to pay off banks and settle millions of dollars in debt tied to an interest rate swaps deal.

Bankruptcy court in Detroit was shut Monday amid severe weather.

Detroit's state appointed emergency manager Kevyn Orr testified Friday that the proposal to terminate the deal with UBS and Bank of America for $165 million is best for the city.

The city pledged casino tax revenue in 2009 as collateral to avoid defaulting on pension debt payments. The swaps allowed Detroit to get fixed interest rates on pension bonds with the banks.

Orr and the banks initially reached a $220 million payoff, but bankruptcy Judge Steven Rhodes ordered the city to negotiate a better deal.

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