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Mediation News

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The lawsuit against the City of Detroit could be headed to mediation.  The bankruptcy-era creditor that filed the lawsuit against the city has asked a federal judge to appoint a mediator to help settle the dispute that arise concerning the development of the now-vacated Joe Louis Arena and surrounding property.

 

The motion was filed in bankruptcy court by Gotham Motown Recovery LLC, a subsidiary of Financial Guaranty Insurance Corp.  It was 12 pages long and explained that Gerald Rosen, a retired judge who mediated Detroit’s Chapter 9 bankruptcy case, has agreed to act as mediator in this dispute.  


According to the motion, "The City should be compelled to mediate this dispute on an expedited basis because a prompt resolution is decidedly in the best interest of the parties.  There is undoubtedly a negotiable solution to the current impasse.  However, given the City's apparent unwillingness to engage directly with Gotham, a mediator is necessary. "

 

The Joe Louis Arena dispute arose after the city granted a 180 day extension on the development agreement timeline.  Gotham had requested the extension be 24 months.

 

FGIC is hoping the mediation can happen as soon as possible, but the city is not on board.  In its response to the motion filed by Gotham Motown Recovery, the city stated it “…strongly opposes mediation for many reasons.  This case does not involve a claim for money damages.  Rather, Gotham apparently wants to renegotiate the Agreement.  The City is not prepared to engage in mediation on that subject.  The request that City Council somehow participate in mediation is completely inappropriate and contrary to the City Charter and State law.  Any lawsuit settlement requires first, approval of the City's Corporation Counsel, and then, separately, submission to and approval by the City Council".