Detroit, Michigan (WXYZ) - Detroit found itself fighting to protect its secrets in bankruptcy court today.
We learned during proceedings today that the city has a secret data room, or digital database, where it keeps information on the city’s financial future. In court city attorneys said that anyone who gets access to this secret data room has to sign a non-disclosure agreement.
Many creditors have been given access to this room, including Syncora Capital Assurance, Syncora Guarantee, Inc. The company guaranteed some of the money the city borrowed from the corporations that oversee retirement funds for city employees, and was in court discussing what it is allowed to do to make sure that money is paid.
Syncora’s attorneys brought up the secret data room. They asked the judge for clarification as to whether providing discovery requested included providing information protected by their non-disclosure agreement with Detroit.
Syncora says considering the circumstances, that the city is in bankruptcy court, that information should be discoverable.
The city then argued that the information needs to be kept secret so the city remains competitive. The judge is questioning how keeping financial information and projections secret would protect the city. He asked why citizens and those owed money by Detroit would not be allowed to see such information.
The city's attorneys said the information isn't relevant to the bankrupcty.
"This is bankruptcy, what's not relevant?" asked the judge.
“The assets are owned by the citizens. The citizens should have access to financial information, just like the creditors. So I am somewhat confused by the city’s posture,” said Seven Action News legal analyst and Bankruptcy Attorney at Howard & Howard, Tim Wittebort.
7 Action News contacted Bill Nowling, spokesperson for Emergency Manger Kevyn Orr. He says that the information the confidentiality agreements are meant to protect is the personal information of employees and information tied to pending litigation.
The city’s attorneys in court were told by the judge to file a motion this week. After that motion is filed and reviewed, the judge will decide whether the information should be released for bankruptcy proceedings.
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