The United States of America files objection to Detroit's bankruptcy-exit plan



(source: Wikimedia Commons)

Believe it or not, the United States of America filed an objection today to Detroit's proposed bankruptcy-exit plan.

A stream of objections poured in today, including a 40-page filing from Oakland County. But the objection by the U.S., on behalf of the Environmental Protection Agency and the U.S. Department of Housing and Urban Development (HUD) caught many by surprise.

At hand, the U.S. said in a three-page filing today that the city must readjust its bankruptcy-exit proposal, called a "Plan of Adjustment," to reflect certain terms set by the EPA.

"The United States has provided the Debtor with specific carve out language but has not yet received a response and files this Objection to preserve its right to contest the scope of the Plan’s discharge and release and injunction provisions," the filing says.

Most notably, though, is the nation's claim that Detroit owes $22 million more to HUD than it claims. The bankruptcy-exit plan filed by Detroit Emergency Manager Kevyn Orr says HUD holds a roughly $90 million claim, which HUD disputes.

"HUD ... believes the aggregate amount of the unpaid principal and interest on the [claim] is $111,959,163.90," according to teh filing. "HUD has provided the Debtor with this amount as well as the supporting evidence for it and discussions between the Debtor and HUD are ongoing. To date, however, the Debtor has not yet agreed with HUD's figure and HUD therefore files this Objection to preserve its right to contest the claim amount stated in the plan."

In case you're interested, here's the filing.


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