Sunday, April 27, 2014

Forward Motions: Detroit Looks to Stay on Track With Restructuring

A high-profile hearing in Detroit on Monday could take the city one step closer to a vote on a restructuring plan.


A federal bankruptcy judge has already dismissed objections from unions, banks and bond insurers, largely clearing the way for a vote by creditors on a debt-reduction plan in the nation’s largest municipal bankruptcy.


Citing “substantial progress” in the case, Judge Steven Rhodes kept the city on an aggressive schedule to have more than 100,000 creditors vote on the city’s plan likely starting in mid-May. The vote would be followed by a hearing on the restructuring plan in late July, leading to a final decision by the Judge Rhodes.


A hearing Wednesday in Wilmington, Del., will determine whether a project to develop nuclear power plant fuel that was put in jeopardy by USEC Inc.'s bankruptcy will continue operating for at least another five months.


A proposed $34.1 million in new federal funding from the U.S. Department of Energy could keep USEC ‘s American Centrifuge project afloat, but the long-term prospects of the project remain murky.


USEC, which provides low-enriched uranium to nuclear power plants, sought Chapter 11 protection in March to clean up its balance sheet but made it clear that the company is still years away from monetizing a new technology to produce nuclear fuel in an energy-efficient manner.


The money for the project will come from the government’s Oak Ridge National Laboratory, a research facility in Tennessee that has partnered with USEC on the creation of gas centrifuge technology for several years.


Rounding out the week, on Friday in Manhattan, General Motors Co. will fight plaintiffs suing the company over an ignition-switch defect. GM says a judge’s approval of its 2009 bankruptcy sale left behind any liabilities related to the ignition-switch defect with the old version of GM.


But lawyers for the plaintiffs, two of several class-action groups suing GM, say the company violated that order by withholding information about the defect.


One group said GM should be “held accountable for its egregious wrongdoing,” while another accused the company of “intentional misconduct.”


The auto maker has recalled roughly 2.6 million cars because of faulty ignition switches. GM has shipped thousands of repair kits for the recall. The defect is linked to at least 31 accidents and 13 deaths.


-Matthew Dolan and Joseph Checker contributed to this article.


Write to Tom Corrigan at tom.corrigan@wsj.com. Follow him on Twitter at @TomCorrigan_.






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