Judge Blocks Bankrupt Detroit's Settlement Plan With Two Banks

Judge Steven W. Rhodes of United States Bankruptcy Court blocked Detroit's plan to "pay $165 million to two big banks to extricate itself from some long-term financial contracts that have been costing the bankrupt city tens of millions of dollars a year," The New York Times reports. The judge said that the payment is too expensive.

The judge's rejection of the payout was a surprise, The Times further reports. The judge said that, instead of paying the $165 million to Bank of America and UBS to get out of interest-rate swap contracts (that are using Detroit's tax dollars earned from local casinos as collateral), Detroit could sue to get out of the contracts.