Detroit Close to Deal with Second Bond Insurer

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Lawyers for Detroit and a major creditor say they’re close to a settlement in the city’s bankruptcy case.

The disclosure was made on Oct. 14 as Judge Steven Rhodes resumed a trial on Detroit’s plan to fix its finances. The city and a bond insurer, Financial Guaranty Insurance, say a deal could be announced by Thursday.

Financial Guaranty has a $1 billion claim in the case. Rhodes had strongly encouraged all sides to settle. Another bond insurer, Syncora, is getting cash and long-term leases on a parking garage and the tunnel between Detroit and Canada.

The judge must decide whether Detroit’s bankruptcy plan is fair and feasible for the years ahead. He still needs to hear from his own expert as well as creditors who don’t have lawyers.