$350 million bank loan on the table for Detroit - FOX 32 News Chicago

$350 million on the table for Detroit, judge needed to approve Barclay's loan

Posted: Updated:
  • Detroit BankruptcyMore>>

  • Schuette endorses Detroit art deal in bankruptcy

    Schuette endorses Detroit art deal in bankruptcy

    Tuesday, June 17 2014 1:47 PM EDT2014-06-17 17:47:06 GMT
    Michigan Attorney General Bill Schuette has given his blessing to a deal that transfers control of art to the Detroit Institute of Arts.
    Michigan Attorney General Bill Schuette has given his blessing to a deal that transfers control of art to the Detroit Institute of Arts.
  • Detroit files plan to fix debt, leave bankruptcy

    Detroit files plan to fix debt, leave bankruptcy

    Friday, February 21 2014 12:49 PM EST2014-02-21 17:49:57 GMT
    Detroit's emergency financial manager filed a plan Friday that would bring the city out of bankruptcy, providing a detailed look at what the Motor City would look like when it finally sheds its financial burdens.
    Detroit's emergency financial manager filed a plan Friday that would bring the city out of bankruptcy, providing for the first time a detailed look at what the Motor City would look like when it finally sheds its financial burdens.
  • Gov. Snyder: 'Detroit's comeback is underway'

    Gov. Snyder: 'Detroit's comeback is underway'

    Friday, February 21 2014 11:35 AM EST2014-02-21 16:35:28 GMT
    Gov. Rick Snyder issued the following statement today on the filing of a plan of adjustment by  Detroit Emergency Manager Kevyn Orr that is part of the city's restructuring.
    Gov. Rick Snyder issued the following statement today on the filing of a plan of adjustment by  Detroit Emergency Manager Kevyn Orr that is part of the city's restructuring under Chapter 9 of the U.S. Bankruptcy Code.
DETROIT (WJBK) -

On Tuesday, the city of Detroit asked a federal judge to approve its deal to borrow up to $350 million to help the city pay off some of its debts and to provide city services.

In a 264-page filing, London-based Barclays, says it is willing to invest in the city as it deems the decision to loan the money as "sound business judgment and should be approved."

It's up to U.S. Bankruptcy Judge Steven Rhodes to approve this deal.

A large chunk of the money, $200-million, would be used to pay off a high interest loan from 2005 and this 'swap move' is expected to save the city $35 million a year.

$125 million would be used to improve quality of life issues.  This include fixing up city blight and providing funds to help the city's struggling police and fire departments.   Some money may be spent on technology upgrades.

Why does Barclays want to loan the money to a bankrupt city?  Fox 2's Charlie Langton says banks do this to make money.  The loan will carry a minimum interest rate of 3.5% and according the deal cut last month, Barclay's will receive status a "super creditor."  This means the bank would get priority over unsecured creditors.

That also means other creditors that the city of Detroit owes money to will likely object to this deal, including the city's largest employee union, Michigan Council 25 of AFSCME. 

The fees in this deal are being kept secret for now.

Exactly when Judge Rhodes will rule on this deal is not known, but a decision should come in the next couple of weeks.

 

  • Local NewsLocal NewsMore>>

  • Attorney wants investigation of city clerk over Arab-American voter suppression

    Attorney wants investigation of city clerk over Arab-American voter suppression

    Tuesday, July 29 2014 11:43 PM EDT2014-07-30 03:43:20 GMT
    It is the tale of two cities. one paints a picture of a meticulous Dearborn Heights city clerk, following the law and fighting for a fair election. The other a story of abuse of power, mishandled ballots and voter suppression.Fatima Abdrabboh is an attorney and Michigan's director of the Arab-American Anti-Discrimination Committee the largest chapter in the country. She is calling for a full-scale investigation into claims that Walter Prusiewicz mishandled ballots from Arab-American voters fo...
    It is the tale of two cities. one paints a picture of a meticulous Dearborn Heights city clerk, following the law and fighting for a fair election. The other a story of abuse of power, mishandled ballots and voter suppression.Fatima Abdrabboh is an attorney and Michigan's director of the Arab-American Anti-Discrimination Committee the largest chapter in the country. She is calling for a full-scale investigation into claims that Walter Prusiewicz mishandled ballots from Arab-American voters fo...
  • Warren grandparents upset after grandchildren see racist graffiti at park

    Warren grandparents upset after grandchildren see racist graffiti at park

    Tuesday, July 29 2014 11:15 PM EDT2014-07-30 03:15:40 GMT
    Tuesday afternoon Bruce and Lubertha Callaway took their grandchildren to Shaw Park in Warren when they saw something they couldn't believe.
    Tuesday afternoon Bruce and Lubertha Callaway took their grandchildren to Shaw Park in Warren when they saw something they couldn't believe.
  • 3-year-old shocked, downed power lines electrify fence

    3-year-old shocked, downed power lines electrify fence

    Tuesday, July 29 2014 10:51 PM EDT2014-07-30 02:51:19 GMT
    A 3-year-old boy is in the hospital after getting shocked by an electrical charge.
    A 3-year-old boy is in the hospital after getting shocked by an electrical charge.
  • Download the FOX 2 Apps


  • FOX 2 News Five-Day Forecast
Powered by WorldNow

205 N. Michigan Avenue
Ground Floor
Chicago, IL 60601
Station Operator: (312) 565-5532
Newsroom: (312)565-5533

Didn't find what you were looking for?
All content © Copyright 2000 - 2014 Fox Television Stations, Inc. and Worldnow. All Rights Reserved.
Privacy Policy | Terms of Service | Ad Choices