Detroit bankruptcy judge sets next steps


The judge in the historic Detroit bankruptcy has laid out the next steps in the city's reorganization, which could have it emerging from bankruptcy by fall.

U.S. Bankruptcy Judge Steven Rhodes set an April 14 hearing on Detroit's Disclosure Statement, which outlines the city's reorganization plan. City officials led by Emergency Manager Kevyn Orr had asked for the expedited hearing, arguing that creditors have had ample time to review the issues at stake.

Kevyn Orr
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The move comes after Detroit submitted its plans Friday—more than a week ahead of schedule. The city has proposed sweeping pension cuts and even bigger reductions in payments to general obligation bondholders, all of which are controversial and the subject of legal challenges.

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Nonetheless, Rhodes gave the parties until April 1 to file their formal objections plans, and the city until April 4 to give its initial response ahead of the April 14 hearing. The judge set a trial for June 16 to confirm the reorganization plan, but he is pushing hard for all sides to resolve their differences ahead of time.

"The Court strongly encourages the parties to resolve all disclosure statement objections before the hearing on the disclosure statement, and strongly discourages the parties from pursuing expensive, time-consuming and unnecessary litigation regarding the adequacy of the disclosure statement," Rhodes wrote.

If all goes according to plan, the largest municipal bankruptcy in U.S. history could be wrapped up by the end of Orr's term in October.

—By CNBC's Scott Cohn. Follow him on Twitter @ScottCohnCNBC