Detroit bankruptcy judge throws out hold-out creditors allegations

08/29/2014 // West Palm Beach, Florida, US // JusticeNewsFlash // Justice News Flash // (press release)

Detroit, Michigan – A U.S. Bankruptcy Court judge has tossed out allegations made by a hold-out creditor in Detroit’s municipal bankruptcy case. As reported by Reuters, Judge Steven Rhodes reprimanded Syncora Guarantee Inc. Thursday for making the claim that that mediators in the case were biased.

Rhodes is quoted as stating of the allegations against Chief U.S. District Court Judge Gerald Rosen and attorney Eugene Driker in his ruling, “The court finds that the allegations concerning the mediators … are scandalous and defamatory.”

As noted in the report, the city of Detroit is seeking to have a pension debt that was insured by Syncora and Financial Guaranty Insurance Co that it defaulted on voided. James H.M. Sprayregen, an attorney at Kirkland & Ellis representing Syncora is quoted as saying in a statement of the creditor’s concerns after the judge’s decisions, “We still have concerns about the fairness of the mediation process… These issues will be addressed more specifically in further court proceedings.”

This report is provided by Justice News Flash – Michigan Legal News

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