Welcome!

News Feed Item

City of Detroit Reaches 'Swaps' Settlement with UBS and Merrill Lynch

Termination Payment Owed by City Reduced to $85 Million from Approximately $286 Million

DETROIT, March 3, 2014 /PRNewswire/ -- Kevyn Orr, the Emergency Manager for the City of Detroit ("Detroit" or the "City"), announced today that the City, UBS AG ("UBS") and Merrill Lynch Capital Services, Inc. ("MLCS") have entered into a settlement under which they have resolved all claims related to pension 'swaps' arrangements among the City, UBS and MLCS.  Detroit has filed a motion to approve the settlement (including a term sheet describing the settlement terms) with the United States Bankruptcy Court for the Eastern District of Michigan ("Bankruptcy Court"), which must still approve the settlement.  A definitive agreement reflecting the settlement will be filed in the coming days.

In the settlement UBS and MLCS also will agree to vote their class of claims in support of the Plan of Adjustment proposed by the City. This is the first creditor class to publicly support the City's plan since it was filed last month.

"We are pleased to have resolved this matter with UBS and Merrill Lynch," said Mr. Orr.  "We appreciate the banks' willingness to work with us to reach a solution that we think balances our goal to provide realistic recoveries to creditors while freeing up critical funds that we can invest to improve the quality of life in Detroit.  We look forward to Judge Steven Rhodes's decision on our proposed settlement, and we hope the 'swaps' resolution serves as a model for compromise on other matters related to Detroit's finances.  The vitality of Detroit and the surrounding region demands good faith negotiation and compromise grounded in reality from all sides, and we remain focused on ensuring a strong future for Detroit."

The settlement represents a significant discount from the $286 million termination payment that the City would otherwise owe in connection with the 'swaps.'  With today's proposed settlement amount of $85 million, Mr. Orr and his team have saved Detroit taxpayers approximately $201 million.  In addition to these savings, the definitive agreement provides for UBS and MLCS, upon payment of the settlement amount, to release their claims on casino tax and development revenue that the City had pledged as collateral for the 'swaps' arrangement.    

The City retains its right to continue to pursue its litigation – announced on January 31, 2014 – against the Service Corporations to invalidate the Certificates of Participation ("COPs"), but it has also agreed to release UBS and MLCS from any claims related to those COPs and 'swaps' transactions. 

During the term of the definitive agreement, which is retroactive to January 1, 2014, Detroit will pay down the $85 million by continuing to make its regular quarterly payments under the collateral agreement to UBS and MLCS.  Any remaining amount will be paid upon consummation of a plan of adjustment or upon securing financing thereafter.

 

SOURCE City of Detroit

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Cloud computing delivers on-demand resources that provide businesses with flexibility and cost-savings. The challenge in moving workloads to the cloud has been the cost and complexity of ensuring the initial and ongoing security and regulatory (PCI, HIPAA, FFIEC) compliance across private and public clouds. Manual security compliance is slow, prone to human error, and represents over 50% of the cost of managing cloud applications. Determining how to automate cloud security compliance is critical...
Enterprises have taken advantage of IoT to achieve important revenue and cost advantages. What is less apparent is how incumbent enterprises operating at scale have, following success with IoT, built analytic, operations management and software development capabilities - ranging from autonomous vehicles to manageable robotics installations. They have embraced these capabilities as if they were Silicon Valley startups.
The Internet of Things is clearly many things: data collection and analytics, wearables, Smart Grids and Smart Cities, the Industrial Internet, and more. Cool platforms like Arduino, Raspberry Pi, Intel's Galileo and Edison, and a diverse world of sensors are making the IoT a great toy box for developers in all these areas. In this Power Panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists discussed what things are the most important, which will have the most profound e...
"MobiDev is a Ukraine-based software development company. We do mobile development, and we're specialists in that. But we do full stack software development for entrepreneurs, for emerging companies, and for enterprise ventures," explained Alan Winters, U.S. Head of Business Development at MobiDev, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
Digital Transformation is well underway with many applications already on the cloud utilizing agile and devops methodologies. Unfortunately, application security has been an afterthought and data breaches have become a daily occurrence. Security is not one individual or one's team responsibility. Raphael Reich will introduce you to DevSecOps concepts and outline how to seamlessly interweave security principles across your software development lifecycle and application lifecycle management. With ...
With more than 30 Kubernetes solutions in the marketplace, it's tempting to think Kubernetes and the vendor ecosystem has solved the problem of operationalizing containers at scale or of automatically managing the elasticity of the underlying infrastructure that these solutions need to be truly scalable. Far from it. There are at least six major pain points that companies experience when they try to deploy and run Kubernetes in their complex environments. In this presentation, the speaker will d...
Dhiraj Sehgal works in Delphix's product and solution organization. His focus has been DevOps, DataOps, private cloud and datacenters customers, technologies and products. He has wealth of experience in cloud focused and virtualized technologies ranging from compute, networking to storage. He has spoken at Cloud Expo for last 3 years now in New York and Santa Clara.
Your job is mostly boring. Many of the IT operations tasks you perform on a day-to-day basis are repetitive and dull. Utilizing automation can improve your work life, automating away the drudgery and embracing the passion for technology that got you started in the first place. In this presentation, I'll talk about what automation is, and how to approach implementing it in the context of IT Operations. Ned will discuss keys to success in the long term and include practical real-world examples. Ge...
As IoT continues to increase momentum, so does the associated risk. Secure Device Lifecycle Management (DLM) is ranked as one of the most important technology areas of IoT. Driving this trend is the realization that secure support for IoT devices provides companies the ability to deliver high-quality, reliable, secure offerings faster, create new revenue streams, and reduce support costs, all while building a competitive advantage in their markets. In this session, we will use customer use cases...
Bill Schmarzo, author of "Big Data: Understanding How Data Powers Big Business" and "Big Data MBA: Driving Business Strategies with Data Science," is responsible for setting the strategy and defining the Big Data service offerings and capabilities for EMC Global Services Big Data Practice. As the CTO for the Big Data Practice, he is responsible for working with organizations to help them identify where and how to start their big data journeys. He's written several white papers, is an avid blogge...
When talking IoT we often focus on the devices, the sensors, the hardware itself. The new smart appliances, the new smart or self-driving cars (which are amalgamations of many ‘things'). When we are looking at the world of IoT, we should take a step back, look at the big picture. What value are these devices providing. IoT is not about the devices, its about the data consumed and generated. The devices are tools, mechanisms, conduits. This paper discusses the considerations when dealing with the...
Wooed by the promise of faster innovation, lower TCO, and greater agility, businesses of every shape and size have embraced the cloud at every layer of the IT stack – from apps to file sharing to infrastructure. The typical organization currently uses more than a dozen sanctioned cloud apps and will shift more than half of all workloads to the cloud by 2018. Such cloud investments have delivered measurable benefits. But they’ve also resulted in some unintended side-effects: complexity and risk. ...
Sanjeev Sharma Joins November 11-13, 2018 @DevOpsSummit at @CloudEXPO New York Faculty. Sanjeev Sharma is an internationally known DevOps and Cloud Transformation thought leader, technology executive, and author. Sanjeev's industry experience includes tenures as CTO, Technical Sales leader, and Cloud Architect leader. As an IBM Distinguished Engineer, Sanjeev is recognized at the highest levels of IBM's core of technical leaders.
Business professionals no longer wonder if they'll migrate to the cloud; it's now a matter of when. The cloud environment has proved to be a major force in transitioning to an agile business model that enables quick decisions and fast implementation that solidify customer relationships. And when the cloud is combined with the power of cognitive computing, it drives innovation and transformation that achieves astounding competitive advantage.
Jo Peterson is VP of Cloud Services for Clarify360, a boutique sourcing and benchmarking consultancy focused on transforming technology into business advantage. Clarify360 provides custom, end-to-end solutions from a portfolio of more than 170 suppliers globally. As an engineer, Jo sources net new technology footprints, and is an expert at optimizing and benchmarking existing environments focusing on Cloud Enablement and Optimization. She and her team work with clients on Cloud Discovery, Cloud ...