Reuters reports Detroit retirees may have been sent ballots with errors earlier this month, which would have allowed them to vote for or against Detroit’s bankruptcy plan to settle approximately $18 billion in debt. The ballot outlined how the city could deal with its public pensions.
Those close to the case claim 2,000 of the ballots sent to the city’s general retirement system contained errors. An attorney representing a court-appointed committee for Detroit retirees, Carole Neville, believes new ballots will need to be issued to the Detroit retirees before the case can move forward.
Judge Steven Rhodes, who was hoping to hold the hearing to review Detroit’s bankruptcy repayment plan as soon as possible was especially frustrated, demanding to know by Friday who was responsible for the ballot errors. According to the current schedule, creditors were required to have their ballots turned back into the court by July 11, 2014. The tight schedule for reviewing the repayment plan had been set to allow Detroit to exit from the largest municipal bankruptcy as soon as possible.
Detroit retirees may need need ballots
No one knows for sure whether Judge Steven Rhodes will postpone the July 24th hearing, which was scheduled to review Detroit’s repayment plan. The ballot errors plus other issues may delay the hearing, which was going to determine if Detroit’s repayment plan was feasible and fair.
Other issues may also cause a delay. For instance, Martha Kopacz, a senior managing director at Phoenix Management Services, has also complained that she does not have enough information to determine if the city’s plan is feasible. She is the expert witness appointed by the court and has been selected by Judge Steven Rhodes to review Detroit’s bankruptcy plan.
Lightsquared ordered to attend mediation
In other bankruptcy news, LightSquared and its creditors, including Dish Network Corp, will complete court-ordered mediation to develop a bankruptcy repayment plan. If LightSquared and their creditors cannot come to a consensual agreement by Tuesday the court will facilitate mediation under Judge Robert Drain.
Paul Basta, a lawyer for an independent committee supervising the LightSquared Chapter 11 restructuring mediation process, agreed that each side was making progress in their negotiations but admitted in a hearing yesterday that he was not sure they would be able to come to full agreement without some help.
LightSquared declared bankruptcy declared after license terminated
LightSquared declared Chapter 11 bankruptcy after their license to operate spectrum was taken away by United States regulators in 2012. The regulators believed the spectrum could “interfere with global positioning systems (GPS).”
LightSquared has had problems with its largest creditor, Ergen. LightSquared argued Ergen used deceptive means to “acquire his $1 billion debt stake and tried to set the stage for a takeover by Dish.” LightSquared planned to restructure its debt under Chapter 11 bankruptcy. LightSquared has financing through June 15, but a company lawyer on Tuesday said it has enough cash to last it through the end of June.
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