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Detroit — A dispute has been resolved between the city and Wayne County over property promised to a key creditor to help resolve the city’s historic Chapter 9 case, an attorney told Detroit’s new bankruptcy judge on Wednesday.

Jones Day attorney Jeffrey B. Ellman told U.S. Bankruptcy Judge Thomas Tucker that the county’s complaint over the parcel has been withdrawn and “resolves the issue completely.”

Wayne County filed a motion in February that had threatened to unravel the city’s critical agreement with bond insurer Syncora Guarantee Inc. The county claimed it was owed land or more than $30 million to make good on a 40-year-old deal it had with Detroit to develop the former Detroit Police Headquarters site on Beaubien.

The county argued it reached a deal with the city in 1976 to demolish the police headquarters and build a jail. The city dumped the property in bankruptcy court last fall, a move that went unopposed by Wayne County until January.

Attorneys for Detroit previously criticized the county, noting that it waited until two months after Detroit’s December emergence from bankruptcy court to raise an issue over the real estate.

The land was included in a settlement reached with Syncora, and gave a subsidiary of the bond insurer the option to acquire the old headquarters site along with a lease of the Detroit-Windsor Tunnel and other property.

Ellman said Wednesday that a stipulation filed Wednesday officially withdraws the county’s opposition.

Tucker, who has served as a federal judge since 2003, is expected to resolve lingering disputes over claims in the case and enforce the city’s plan to shed $7 billion in debt, restructure another $3 billion and invest $1.7 billion into service improvements and restructuring. He replaces Judge Steven Rhodes, who retired in February.

Tucker opened Wednesday’s status conference by stressing he didn’t intend to make any substantive rulings.

He didn’t immediately weigh in on the differing positions of the state and attorneys for Detroit’s General Retirement System on how supplemental pension payments from an Income Stabilization Fund should be applied to low-income retirees deemed eligible.

Robert Gordon, an attorney for the city’s General Retirement System, told Tucker he would like clarity on the matter. The fund was established to prevent retirees from falling below the poverty line as a result of cuts imposed through the bankruptcy plan.

Under the city’s plan, general workers took a 4.5 percent base cut in pensions and saw the elimination of an annual cost-of-living increase.

The city is also recouping $239 million from an optional annuity savings fund accounts of some general retirees who were credited with interest earnings that exceeded the retirement system’s actual investment returns.

Gordon contends that the supplemental payments should factor in the impact of the annuity recoupment, or “clawback,” for some of the retirees eligible for the restoration program. But the state argues that the fund only seeks to address the monthly pension reductions and COLA changes that arose out of the retirement plan’s underfunding.

“We are looking for guidance,” Gordon told Tucker, adding he intends to file a motion asking the judge to make a determination on the matter. “This is an issue that needs to be resolved.”

Steven Howell, an attorney representing the state, countered that the state has “sole discretion” over the terms of the ISF program and it opposes using the money to restore “clawback“ funds.

Howell says the state thinks it’s “inappropriate” to support using the supplemental funds to restore the payments that he told Tucker “were questionable to begin with.”

cferretti@detroitnews.com

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