Not so fast, Federal Bankruptcy Judge Steven Rhodes tells a lawyer representing Detroit.
Rhodes told legal representatives of the city and a bond insurance firm to explain why financial details for creditor access via a digital "data room" should be kept out of public view.
"This is bankruptcy. What is not relevant?" asks Federal Judge Steven Rhodes.
Reuters wire service reporter Bernie Woodall explains the issue that arose in court Wednesday morning and afternoon:
The city, under Emergency Manager Kevyn Orr, set up and provided the content for the password-protected data room and allowed access to creditors involved in the historic Detroit bankruptcy filing only if they signed a nondisclosure agreement.
Creditors and Orr's office have not revealed what the data consists of. While it was not intended to be seen by the public, representatives from the city's unions and pension funds as well as corporate creditors have been given the password after agreeing to the nondisclosure agreement.
At a hearing earlier on Wednesday, Rhodes seemed to take umbrage when Gregory Shumaker, attorney for the Jones Day law firm that is representing the city in the bankruptcy filing, said some of the financial information in the so-called room was not relevant to the Chapter 9 filing.
"This is bankruptcy. What is not relevant?" said Rhodes. . . . "What would be the harm to the city's interest?" countered Rhodes.
Free Press coverage includes this exchange from roughly that point in the first of two hearings:
Rhodes: “Why are they sensitive? Doesn’t the city want every one of its citizens to see what its financial future is projected to look like?”
Shukamer: “Yes, your honor.”
Rhodes: “What’s the problem?”
Shumaker: “There are a lot of different scenarios played out in those projections, and the city believes it’s not in its best interest to be disseminated in public.”
Rhodes: “Generally speaking, speculation and conjecture are not the basis for confidentiality.”
The judge gave Jones Day until mid-afternoon to come up with a coherent argument on why the data room should remain closed to all but those who agree not to disclose its contents.
This article will be updated with news from that hearing, still under way.
