Judge Gerald Rosen and Eugene Dryker
Chad Livengood reports in the Detroit News that financial insurance giant Syncora Guarantee Inc. on Tuesday filed a blistering objection to Detroit’s bankruptcy exit plan, accusing court-appointed mediators Gerald Rosen and Eugene Driker of being “agenda driven" and "conflicted," and charging they have "colluded with certain interested parties to benefit select favored creditors to the gross detriment of disfavored creditors.”
Syncora, writes Livengood, has been the fiercest critic of the “grand bargain,” a plan to infuse the city’s pension plans with the equivalent of $816 million over 20 years in private and public funds in exchange for shielding the Detroit Institute of Arts’ multi-billion dollar collection from being sold.
Syncora’s legal filing called into question whether Rosen, the chief district court judge and Driker, a veteran Detroit attorney, have acted properly as neutral mediators.
Livengood says attorneys involved in the bankruptcy have expressed that complaint privately for months. At the outset of Detroit’s July 2014 bankruptcy filing, U.S. Bankruptcy Judge Steven Rhodes appointed Rosen to be chief mediator, and Rosen tapped Driker to be part of his mediation team.
Driker’s wife, Elaine Driker, is an emeritus member of the DIA’s Board of Directors, which Syncora’s attorneys called an “undisclosed personal interest in protecting the interests of the DIA.”
“Courts have found mediators or arbitrators should have been disqualified for far less glaring conflicts of interest than Mr. Driker’s here,” Syncora attorney Ryan Blaine Bennett wrote in the 60-page filing.
James Sprayregen, a Chicago attorney representing Syncora, said Tuesday the bond insurer is prepared to appeal Rosen and Driker’s actions if Rhodes does not throw out the plan.
Rosen declined to comment, Livengood writes, and Driker could not be reached.
