Syncora Found to Have Defamed Detroit District Judge, Sanctions May Be Imposed

Syncora Guarantee Inc., an opponent of Detroit’s municipal debt-adjustment plan, saw a legal strategy backfire when a judge ruled last week that the company made “scandalous and defamatory” allegations about the local chief U.S. district judge and mediator in the city’s bankruptcy (In re City of Detroit, Bankr. E.D. Mich., No. 13-53846, order issued).

U.S. Bankruptcy Judge Steven Rhodes not only struck portions of Syncora’s court papers and narrowed the issues at the trial that begins Sept. 2 for approval of the city’s plan. He also gave the bond insurer until Sept. 12 to explain why he shouldn’t ...