April 11 (Bloomberg) — Detroit's three attempts to cancel interest-rate swaps for less than $100 million show how tough a fight it may face in July to reduce $18 billion in debt without cooperation from thousands of creditors in its record municipal bankruptcy.
"It's going to be an even bigger battle," attorney George South, a bankruptcy specialist, said. "Ultimately, that's going to be the end of the day for these creditors. They are going to be fighting even harder."
U.S. Bankruptcy Judge Steven Rhodes is scheduled to tell the city today whether he will approve its proposed settlement with UBS AG and Bank of America Corp. to end interest-rate swaps that have cost taxpayers $200 million since 2009. The deal calls for the city to pay the banks $85 million in installments.
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