Detroit bankruptcy Judge Steven Rhodes to resolve red flags before Aug. 21 trial

DETROIT (WXYZ) - Detroit Bankruptcy Judge Steven Rhodes telegraphed he will resolve several red flag issues by placing his expert Marti Kopacz as the first witness in the Trial on Detroit's Plan of Adjustment.

It is set to start August 21, unless delayed by the Judge.

Among the issues, Detroit's budget is not "harmonized" with the Plan of Adjustment's forecasts and projections, state revenue sharing and a state required 5 percent contingency.

The Judge also says the Plan does not spell out revitalization specific plans and whether Mayor Mike Duggan is on board with all aspects of the plan.

The judge says his expert points out Detroit needs vast improvements in financial reporting, IT and HR.

The State Financial Review Commission will oversee Detroit finances, but how and with what staff, the Judge wants to know.

City attorneys told the judge they are close to another agreement in closed mediation.

Is that turning the Water and Sewerage Department into a regional authority?

Wall Street creditors stand to lose hundreds of millions of dollars in a cram down and will be fighting for their own financial survival.

Two more court hearings are set for next week.  

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