Syncora should keep their hands off the DIA collection - New York News

Syncora should keep their hands off the DIA collection

Posted: Updated:

Opinion by Mike Renda
General manager, WJBK FOX 2

(WJBK) The announcement that the city of Detroit had reached a five year agreement with the majority of the unions in it’s bankruptcy case was certainly a major and positive step forward in the ultimate plan to restructure the city.
 
Another important step was Emergency Manager Kevyn Orr traveling to Lansing last week to lobby state lawmakers to approve the multi-million dollar state contribution to the so-called “Grand Plan.” While this won’t be an easy sell, Gov. Snyder has made it clear to the legislature that the state must ante up to help Detroit emerge from bankruptcy with a plan that can succeed for the ultimate good of the state.
 
But a potential roadblock is the involvement of Syncora, the bond insuring company who underwrote a reported 250 million dollars of the ill-fated billion dollar pension debt deal that Kwame Kilpatrick put together in 2005.
 
Syncora is raising a stink about the Attorney General and the Detroit Institute of Arts position that it, the DIA, is protected from liquidation in bankruptcy. Syncora claims those assets need to be sold to satisfy the remaining creditors.
 
The problem is that as part of the “Grand Plan” for Detroit to emerge from bankruptcy, the foundations representing the DIA contributed over 300 million dollars to help ease the huge hit the Detroit pensioners were going to take.
 
In turn, the DIA assets would not be sold and would establish a separate foundation safe from future city oversight. The city believes this DIA settlement was the best and most practical to get value from its interests in the art while keeping the DIA whole and functioning as a major asset for Detroit far into the future.
 
Syncora just wants its money and could care less about Detroit’s plan.
 
They need to heed the suggestions of U.S. Bankruptcy Judge Stephen Rhodes who has made it clear that he expects the remaining creditors to work out a resolution plan with the city and avoid asset sales.
 
Those sales would lessen the potential for Detroit to realize its full revitalization.

Detroit has now reached deals with many of it’s creditors including pension funds, banks and general bondholders and is on the cusp of finalizing their “Grand Plan” of reorganization.

Syncora needs to get to the table and hammer out a deal with the city and Keep their Hands OFF the Art!!
 
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