The federal judge who approved Detroit's plan for exiting the biggest-ever U.S. municipal bankruptcy gave the city on Wednesday the go-ahead for putting the plan in motion.
"The city needs to begin implementing this plan immediately," U.S. Bankruptcy Judge Steven Rhodes said at a hearing.
Rhodes waived a 14-day automatic stay on the plan, but did not decide the official date for the city's emergence from bankruptcy. Rhodes said he will conduct a hearing on Nov. 24 on the matter.
Rhodes on Friday ruled Detroit's plan for cutting $7 billion of its $18 billion of debt was fair to creditors and feasible for the city to carry out. The second step in the process is issuing a confirmation order that sets an effective date for the plan's many measures and settlements.
The city is eager for the plan to take effect soon so it can obtain an exit loan and set up retiree healthcare associations created as part of a settlement with pensioners by the end of the year.
At the same time, the city has raised questions about the fees charged by its lawyers and outside consultants during the nearly 16 months Detroit was in bankruptcy and operating under a state-appointed emergency manager. Rhodes said he will conduct a review of the fees and on Wednesday he scheduled mediation sessions for the first week of December.
(Reporting by Peter Suciu in Detroit; additional reporting by Karen Pierog in Chicago and Lisa Lambert in Washington; editing by W Simon and Matthew Lewis)