Michigan - Detroit Sues Insurer Over Casino Money

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Michigan - Detroit Sues Insurer Over Casino Money

Detroit has sued a bond insurer, Syncora Guarantee Inc., blaming it for the withholding as much as $11 million a month in casino revenue, Kevyn Orr, the city’s emergency manager, said Friday. Mr. Orr was appointed in March to lead the city out of a fiscal crisis that has put it on the brink of bankruptcy. Detroit seeks a court order barring Syncora and other defendants from limiting its access to money from its three casinos. Syncora insures some of the $1.4 billion in “certificates of participation” issued by the city to shore up two public employee pension funds as well as swap agreements through which the city hedges interest rates payable on some of the certificates. Casino-derived revenues were pledged to secure the swaps, Mr. Orr said.

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