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Detroit bankruptcy judge sees good, bad and ugly in bus tour

By Peter Suciu

DETROIT (Reuters) - The federal judge overseeing Detroit's bankruptcy case took a three-hour bus tour on Friday to view various aspects of the troubled city, from notorious blighted areas to bright spots such as the Detroit Institute of Arts.

Detroit had argued the tour would provide important evidence for U.S. Bankruptcy Judge Steven Rhodes of the challenges facing the city as it seeks approval for its plan to adjust $18 billion of debt and exit the biggest municipal bankruptcy in U.S. history.

A confirmation hearing on the bankruptcy is scheduled to start on Aug. 21.

Greg Shumaker, an attorney for the city, told reporters Rhodes saw "the good, the bad and the ugly" of Detroit, quoting from the title of the 1966 Clint Eastwood Western. The judge had ruled reporters would not be allowed to join the tour.

"The blighted areas would be the ugly," said Robert Hertzberg, another city attorney. "The good would be when you go to the new Meijer (grocery store) ... or when you go through the DIA. When you see the blight, it is clearly the bad."

Rhodes did not comment to reporters after the tour. Shumaker, who sat behind Rhodes on the bus, said the judge "looked around a lot."

Also on the bus were representatives for creditors in the bankruptcy, including bond insurance firms Syncora Guarantee Inc and the Financial Guaranty Insurance Co.

"It was important in our mind for the judge to have a site visit," said Hertzberg. He noted that it was "extremely unusual" for a judge to go out and visit a site on a case, and he had not previously seen a judge do so in 35 years of practicing law.

The timing of the tour was not made public until after it was concluded. However, court officials did videotape the tour, which is expected to play a role in the forthcoming confirmation hearing.

(Reporting by Peter Suciu in Detroit; Editing by Mary Wisniewski and Mohammad Zargham)

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