Detroit Bankruptcy Case

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Timothy T Brock DetroitEarlier today, a federal judge ordered ongoing mediation in Detroit’s historic bankruptcy over a potential settlement between the city and one of its fiercest creditors, while adding holdout creditor Financial Guaranty Insurance Co., to the list of parties with required attendance.  The chief mediator in the bankruptcy case, US District Judge Gerald Rosen, ordered that mediation, which began in Thursday, will also be taking place on Friday and will continue to do so day-to-day for as long as necessary.

Detroit and Syncora Guarantee Inc, the bond insurer that had been the fiercest holdout creditor in the case, notified the US Bankruptcy Court on Tuesday that they had reached a settlement in principle.  Sealing this deal would leave another bond insurer, FGIC, as the only major holdout creditor left in the biggest-ever municipal bankruptcy that Detroit filed back in July of 2013.  FGIC, which currently has a $1.1 billion exposure in the case from guaranteeing payments on the city’s pension debt, issued a statement yesterday that said it remains open to “good faith settlement discussions”.  Both Syncora and FGIC faced recoveries of 10 cents on the dollar or less in the bankruptcy as other creditors, including the city’s pension funds, reached deals.

If they want to settle with Detroit, Syncora must also settle claims and counter-claims with UBS AG and Bank of America Corp Unit Merrill Lynch Capital Services over interest-rate swaps related to the pension debt that it also insured.  The investment banks were included in both the previous and the current mediation orders from Rosen.  Yesterday, US Bankruptcy Judge Steven Rhodes put Detroit’s case on hold until Monday in the wake of this potential deal.


Times Square Law Raises Questions

Timothy T Brock Times Square

If the law being thrown around the City Council passes, characters like this Mickey and Minnie Mouse could become a rare occurrence in Times Square.

Yesterday, a bill was introduced into New York’s City Council that is designed to license and regulate the “costumed people” in Times Square who pose for tips.  However, it would likely force numerous other street performers across New York to pay a $175 fee, register with the Department of Consumer Affairs and face fines and/or jail time for noncompliance, much like street vendors who sell purses and pipes.  Int. 467, drafted by Councilman Andy King, would make it illegal for “any costumed individual while wearing a costume to solicit in return for posing for photographs or otherwise interacting with the public in public places without having first obtained a license.  Under this initiative, a costume is defined as something that “obscures or shrouds the face of a person beyond recognition or causes a person to resemble a character rather than his or her own personal identity”.

According to King, the bill is all about safety, with the Council looking to set the rules of engagement in Times Square.  However, King’s bill concerns any public space in the city.  This would not just apply to those costumed hecklers in Times Square, but also living statues, the Silver Men and just about any performer who resembles something or someone other than themselves.  While the legislation was drafted due to concern for safety, some Council members are concerned with the overcriminalization of certain groups; a large number of costumed street performers are immigrants or minorities.

According to Eugene Volokh, a constitutional law professor at UCLA, this bill raises complex First Amendment issues; whether panhandling is constitutional or not is a complicated question indeed.  In a previous case, Bery v. City of New York, the 2nd Circuit Court of Appeals struck down a New York City law requiring people selling paintings and photographs to obtain a license first.  While the current bill being proposed is content-neutral, to the hecklers of Times Square, it’s a ban on a particular form of speech.  However, it can be argued that this isn’t actually an issue of free speech, as the actions that these people are performing are more a business than a form of expression.