RECAP: Bankruptcy judge reviews Chapter 9 plan for Detroit

DETROIT (WXYZ) - 7 Action News reporter Smita Kalokhe followed all of the updates inside the United States Eastern District Bankruptcy Court during a status hearing regarding Detroit's Chapter 9 filing.

Follow the updates below:

1:43 Done for the day: Court is adjourned. Thanks for joining us and following the blog. Hope to see you next time.

1:40 Back to Retiree Committee: U.S. trustee (UST from here on out) is back. Asking for 21 days to move forward with the committee. A questionnaire will be posted on UST's website, city's website and court's website.

1:37 Emergency Manager to testify?: Attorney says during an evidentiary hearing, it is possible that Emergency Manager Kevyn Orr will be called to testify.

1:24 Syncora: The firm has been waiting (eagerly to say the least) to have its say in court. It told the judge it has been excluded from negotiations with the city.

1:22 Forming Retiree Committee: Judge asked U.S. trustee attorney how much time she needs to create the committee. When she told him she didn't have a specific answer, the judge responded light-heartedly, "If you don't give me a number, I'll make that up." U.S. trustee attorney says she will conference with her colleagues and get back to him.


1:17 Retiree Committee: Judge grants city's motion to create a city that would represent the retirees. Who should serve will be left to the U.S. Trustee.

1:00 Court recess: Judge takes 15 minute recess to think about the committee issue. He's looking at the possibility of a retiree committee and also a separate tort committee. The second one would deal with non-bankruptcy lawsuits and claims against the city.

12:53 City on Retiree board: Jones Day attorney says the city is not participating in the selection of committee members that would represent retirees. She does, however, say that assuming the comittee's fees are reasonable, the city would pay for them.

12:41 Retirees best interest? Part two: A city retiree who is also a lawyer representing himself is telling the judge unions shouldn't speak on behalf of retirees. The speaker used to work for the city's law department and currently draws a pension. He says, in the past, there has been a limited amount of money, and unions side with current employees -- not retirees.

12:36 Retirees best interest?: The judge says he's heard others question if a labor union, which by law represents current employees, has a conflict of interest representing retired workers. UAW attorney refutes that saying there is not an "inherent conflict."

12:33 Representing Retirees: The city has 20,000 retirees. How does the court ensure their voices are heard? If  a representation board is created, who will be on it? How will it work? Will it be paid for?

12:20 Back at it: I'm back in the courtroom following my noon live shot. I am also fielding questions and tweets. Feel free to reach out at skalokhe@wxyz.com or @SmitaKalokhe on Twitter. It seems the judge is now focused on making sure retirees are represented in the case.

11:45 Live shot time: I'm stepping out of the media room to give you a live update on Action News at noon. Action News Reporter Jim Kiertzner is staying put in the courtroom and keeping an eye on all the happenings. See you noon.

11:25 Independent Fee Examiner: The judge is proposing that an independent fee examiner is used to ensure the city doesn't pay too much for attorney services. This is a common procedure in court happenings.

11:15 Mediation is premature: The attorney for the pension plan says mediation would be premature. Judge says he makes a good point, but thinks the mediator is better than the court since she/he would be less rigid than the court.

11:05 Mediation: Judge says mediation would be in the best interest of the city, its creditors and its citizens.

10:59 Not fast enough!: The city's attorney says they would like to file a reorganization plan by the end of the year. That is WELL BEFORE the proposed deadline the judge set forth -- which is Mar 1. Attorney says " Time is our enemy."

10:52 Too Fast-Paced?: A creditor's attorney tells the judge his proposed deadlines may be "too aggressive."

10:47 Collective Bargaining: Most of the city's collective bargaining agreements have expired. Only 6-7 remain. Those are with water and sewer department. City attorney says he doesn't expect to need court relief for that.

10:38 Firm Deadline: Some creditors are asking for leniency on the deadlines to file objections, but the judge doesn't seem to agree. He told attorneys, "Court wants to set a firm deadline for filing objections."

10:35 Protesters: Channel 7 Photographer Scott Wolan reports there are several protesters outside the courthouse. We'll hear more from them during the noon newscast. Police and firefighters are among those protesting.

10:20: Friendly negotiations?: Heiman says the city has has "civil and friendly" discussions with its creditors. He admits the city's proposal (which offers cents on the dollar) to creditors

calls for "significant debt relief" which many don't like. He also says the city welcomes the idea of mediation  -- something the Judge is already considering.

10:15 Creditors Galore: Jones Day attorney, David Heimen, says the city has filed its list of creditors with the court. The document is 3,500 pages!! Detroit has more than 100,000 creditors.

10:09 Judge's role: Judge says his role is to resolve legal issues that are raised. The two big issues he will determine: Detroit's eligibility and also if Detroit's bankruptcy plan meets Chapter 9 code. Judge says court has no role in determining how city services will be provided (ie. police and fire). He says nothing in Chapter 9 gives the court authority to hire or fire anyone in city government.

10:05 Long day ahead:  Several things on the agenda. Judge will speak of his limited role first.

10:01 Here we go! Judge Steven Rhodes is seated. Proceedings are beginning now.

9:45 What's ahead: Here are a few things we're looking for: The judge will likely discuss his role in the case -- how limited or broad will it be? Judge Rhodes has set forth a tentative schedule that some have called aggressive and fast-paced. We will hear more on that. And a hot topic: Detroit' eligibility to even file for bankruptcy. Today is the first step in finding out if the city can file. Throughout the process the city will have to demonstrate that it has either negotiated in good faith with its creditors or that negotiating with its creditors before bankruptcy was impossible.

9:30--Welcome: Thanks for joining me this morning! I'm in the media room waiting for things to get shaking here at the Eastern District. Judge Steven Rhodes will preside over a status hearing regarding Detroit's Chapter 9 bankruptcy filing. We're expecting to hear more about how the city has negotiated with creditors and get a better idea of a timeline for the case.

Have a question or comment for Smita? E-mail her at skalokhe@wxyz.com . You can also follow her on Twitter @SmitaKalokhe or like her on Facebook.

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