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In re City of Detroit

In re City of Detroit

United States Bankruptcy Court for the Eastern District of Michigan, Southern Division

December 31, 2014, Decided

Chapter 9, Case No. 13-53846

Opinion

 [*156]  Supplemental Opinion Regarding Plan Confirmation, Approving Settlements, and Approving Exit Financing

Table of Contents

I. Introduction

II. The Plan Confirmation Process

A. The City's Plans of Adjustment

B. An Overview of the City's Eighth Amended Plan of Adjustment

C. Objections [**2]  Filed by Represented Parties

D. The Participation by Unrepresented Parties

1. The Unrepresented Parties' Oral Presentations

2. The Unrepresented Parties' Participation in the Confirmation Hearing

E. The City Tour

III. The Settlements in the Plan

A. Mediation

B. The Applicable Law

C. The Bard Considerations Applicable to All of the Settlements

D. The Grand Bargain

E. The State Contribution Agreement

1. The Potential Claim Against the State of Michigan

2. The Terms of the State Contribution Agreement

3. The State Contribution Agreement Is Fair and Equitable

a. The State Contribution Agreement Is Reasonable in Amount

b. The Releases in the State Contribution Agreement Are Reasonable

F. The DIA Settlement

1. The Dispute over the DIA Art

2. The Terms of the DIA Settlement

3. The DIA Settlement Is Fair and Equitable

G. The Pension Global Settlement

1. The Terms of the Pension Global Settlement

a. The Treatment of Pension Claims

b. Restoration of Pension Benefits

c. Governance and Oversight

2. The Pension Global Settlement Is Fair and Equitable

H. The Annuity Savings Fund Recoupment Settlement

1. The Dispute Over the Excess ASF Credits

2. The Terms of the ASF Settlement

3. Objections to the ASF Settlement

4. The ASF Settlement [**3]  Is Fair and Equitable, and Does Not Violate the

Bankruptcy Code

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524 B.R. 147 *; 2014 Bankr. LEXIS 5286 **

In re: City of Detroit, Michigan, Debtor

Subsequent History: Appeal dismissed by, As moot, Motion granted by Davis v. City of Detroit (In re City of Detroit), 2015 U.S. Dist. LEXIS 131175, 2015 WL 5697778 ( E.D. Mich., Sept. 29, 2015)

Motion granted by, Appeal dismissed by Cipollone v. City of Detroit (In re City of Detroit), 2015 U.S. Dist. LEXIS 131178, 2015 WL 5697757 ( E.D. Mich., Sept. 29, 2015)

Appeal dismissed by, As moot, Motion granted by Darrah v. City of Detroit (In re City of Detroit), 2015 U.S. Dist. LEXIS 131177, 2015 WL 5697779 ( E.D. Mich., Sept. 29, 2015)

Appeal dismissed by, As moot Brown v. City of Detroit (In re City of Detroit), 2015 U.S. Dist. LEXIS 134477 ( E.D. Mich., Sept. 29, 2015)

CORE TERMS

settlement, pension, confirmation, projections, retirees, funding, municipal, Bonds, feasibility, Bargain, obligations, impaired, fair and equitable, parties, initiatives, financing, billion, recoupment, benefits, COPs, blight, holders, employees, Terms, bankruptcy code, plans, restructuring, best interest, good faith, approves

Bankruptcy Law, Plans, Plan Contents, Discretionary Provisions, Civil Procedure, Settlements, General Overview, Procedural Matters, Plan Confirmation, Prerequisites, Fairness Requirement, Constitutional Law, State Constitutional Operation, Pensions & Benefits Law, Governmental Employees, Bankruptcy, Case Administration, Bankruptcy Court Powers, Municipality Bankruptcy, Discharge & Dischargeability, Effect of Discharge, Effect on Third Parties, Governments, Local Governments, Finance, Tax Law, State & Local Taxes, Real Property Taxes, Legislation, Interpretation, Judgments, Enforcement & Execution, Claims By & Against, Evidence, Admissibility, Expert Witnesses, Daubert Standard, Testimony, Claims, Types of Claims, Claim Classification, Good Faith Requirement, Congressional Duties & Powers, Reserved Powers, Reservation of State Power, Eligibility, Reorganizations, Plan Acceptance, Proponent Compliance With Code, Disclosure Statements, Plan Modification, Equal Protection, Nature & Scope of Protection, Fundamental Rights, Procedural Due Process, Scope of Protection, Privileges & Immunities, Bill of Rights, Civil Rights Law, Section 1983 Actions, Elements, Scope, Government Actions, Administrative Powers, Executory Contracts & Unexpired Leases, Eminent Domain & Takings, Reorganizations, Case or Controversy, Constitutionality of Legislation, Spending & Taxation, Employees & Officials, Duties & Powers, Property, Labor & Employment Law, Collective Bargaining & Labor Relations, Transportation Law