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Calif. Ch. 9 Case Will Guide Detroit on Eligibility Issues

July 22, 2013 Media Coverage

Law360
July 22, 2013
"Calif. Ch. 9 Case Will Guide Detroit on Eligibility Issues"
Farella Braun + Martel's Gary Kaplan commented on how the lessons from the Stockton and San Bernardino California Chapter 9 cases could impact Detroit’s case.

Although the decisions by the California courts are not binding on the Michigan bankruptcy court, they may be persuasive in light of the dearth of reported cases on certain issues, such as whether the city has met the requirements for bankruptcy relief and whether it can reject its contracts related to retiree health care and other benefit obligations, according to Gary Kaplan, co-chair of Farella Braun & Martel LLP’s restructuring, insolvency and creditors rights group.

“The track record of creditors accepting large reductions in payment of the debts owed to them will also likely impact the city’s negotiations with creditors in the Detroit case,” he said.

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