Detroit’s bankruptcy trial begins today

DETROIT – Lawyers for Detroit will attempt to convince a federal judge at the city’s bankruptcy trial that its plans to wipe out billions of dollars in debt should be approved.

After some delays, the start of the trial today in U.S. District Court comes just over 13 months after Detroit became the largest U.S. city to file for bankruptcy.

Detroit expects to cut $12 billion in unsecured debt to about $5 billion, which is “more manageable,” according to Bill Nowling, a spokesman for emergency manager Kevyn Orr.

Most creditors, including more than 30,000 retirees and city employees, have endorsed the plan of adjustment put together by Orr and his restructuring team.

The strongest opposition to the plan has come from bond insurers like New York-based Syncora Guarantee. Syncora has said its claim is about $400 million and that Detroit has unfairly discriminated against financial creditors.

Bankruptcy Judge Steven Rhodes has scheduled additional hearing dates, if needed, into October.