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Judge delays ruling on city lights to figure out financing terms
10:46 AM, Nov 27, 2013
12:04 PM, Nov 27, 2013
DETROIT (WXYZ) - Detroit Bankruptcy Judge Steven Rhodes has delayed a ruling on whether Detroit and its Public Lighting Authority can move forward with temporary financing and improvements.
The judge says there is a possible conflict of interest with an attorney from the firm Miller Canfield. Canfield was in Bankruptcy Court representing the PLH but has also represented the City of Detroit.
The Public Lighting Authority wants to take out a bridge loan of $60 million dollars to start work on fixing Detroit street lights and replace the loan later with 30 year bonds.
Syncora, a Wall Street bond insurance company and other creditors are arguing the money used to fix the lights should go to creditors.
Detroit collects $40 million a year from residents in tax revenue The money is transferred from Detroit to the PLA -- which was formed just this year.
Twelve and half million dollars of that is pledged to back the loans.
One attorney argued the financing by the city leaves creditors "in the dark." Judge Rhodes said "the dark you're in does not compare to the darkness the citizens of Detroit are in and the crime that results because of that."
The judge has given attorneys one week to file briefs on the possible conflict and said it was "most unfortunate the issue came to court the way it did."