Forward Motions: Judge to Hear Closing Arguments in Detroit Bankrupt...

After a weekslong trial on the viability and fairness of Detroit’s restructuring plan, U.S. Bankruptcy Judge Steven Rhodes will hear closing arguments in the case on Monday.

A ruling could follow within several weeks, and city officials hope Detroit could be out of bankruptcy court as soon as Thanksgiving.

Most of the city’s creditors, including municipal employees and retired workers, have agreed to settle. Some individual objectors remain, arguing in part that the city’s emergency manager acted improperly to cut any benefits to pensioners.

The city’s largest holdout creditor unveiled a deal last week to stop fighting and instead take a major stake in the city’s revival.

Detroit filed for bankruptcy protection in July 2013 with an estimated $18 billion in long-term obligations.

The city’s current debt-cutting plan calls for a $7 billion reduction in debt and a $1.4 billion reinvestment in removing blighted buildings and boosting police and fire services.

Also Monday, Energy Future Holdings Corp. will ask Judge Christopher Sontchi of the U.S. Bankruptcy Court in Wilmington, Del., to sign off on rules for an auction of its 80% stake in Texas transmission business Oncor.

The Dallas energy company has defended the planned bankruptcy auction as a way to boost its value as it works to fix a balance sheet upset by plummeting natural-gas prices.

Offers have been coming in since July, when NextEra Energy Inc. went public with a takeover offer for Oncor.

Under the proposed rules, a second round of competition will be held before a lead bidder is chosen for an auction to be held in February.

Energy Future has garnered support from some creditors for the sale but faces opposition from investors in billions of dollars of endangered debt.

Creditors unhappy with the process say Energy Future is steering the deal toward a transaction where what is actually being sold is equity in a reorganized Energy Future. In other words, the deal can’t close until there is a confirmed Chapter 11 plan in place, one that cements the distribution for all creditors.

Energy Future filed for Chapter 11 protection in April, with some $42 billion worth of debt to resolve.

In Chicago on Tuesday, the operator of the Indiana Toll Road, ITR Concession Co., will seek approval of its Chapter 11 exit plan.

The plan envisions a sale process that will help it pay off its multibillion-dollar debt load or, if such bids can’t be found, will issue new debt and equity to its lenders.

Earlier this month, Judge Pamela S. Hollis of the U.S. Bankruptcy Court in Chicago approved ITR Concession’s agreement with Indiana’s finance authority, which sets what the toll road operator’s attorney has called “ground rules” for its Chapter 11 case and beyond.

The agreement preserves the state’s rights to approve or deny any new operator whom ITR Concession might ask to take over the 157-mile road, which stretches from Chicago to the Ohio state line.

The road, on which nearly 130,000 vehicles travel every day, first opened in 1956 but was privatized 50 years later.

ITR Concession’s owners, units of Spanish infrastructure company Ferrovial SA and Australian investment bank Macquarie Group Ltd., paid $3.8 billion in 2006 for the right to operate the road for 75 years.

-Matthew Dolan, Peg Brickley and Jacqueline Palank contributed to this article.

Write to Tom Corrigan at [email protected]. Follow him on Twitter at @TheTomCorrigan.