National and local philanthropic foundations have committed $330 million toward a deal to avoid cuts to Detroit retirees’ pensions and to save the Detroit Institute of Arts’ renowned collection, federal mediators involved in the city’s bankruptcy proceedings announced on Monday.

The plan was a first both in the foundation world, which has not been a source of money to shore up public-sector pensions in the past, and in municipal bankruptcy cases, experts said. It also offered the first indication of progress in the intense mediation with Detroit’s creditors to resolve the city’s financial crisis. Those talks have been proceeding under strict secrecy guidelines.

Nine foundations, many with ties to Michigan — including the Ford Foundation, the Kresge Foundation and the John S. and James L. Knight Foundation — have pledged to pool the $330 million, which would essentially relieve the city-owned Detroit Institute of Arts museum of its responsibility to sell some of its collection to help Detroit pay its $18 billion in debts. In particular, the foundation money would help reduce a portion of the city’s obligations to retirees, whose pensions are at risk of being reduced in the bankruptcy proceedings. By some estimates, the city’s pensions are underfunded by $3.5 billion.

As part of the plan, which negotiators have been working on quietly for more than two months, the museum would be transferred from city ownership to the control of a nonprofit, which would protect it from future municipal financial threats…

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Energy Future Holdings Corp., the Texas power generator taken private in the biggest leveraged buyout ever, is close to obtaining a loan of more than $3 billion ahead of a bankruptcy filing that may come this month, said four people with knowledge of the matter.

Citigroup Inc., JPMorgan Chase & Co., Bank of America Corp. and Morgan Stanley are the key lenders vying to provide parts of the debtor-in-possession financing, and first-lien creditors to Energy Future’s Texas Competitive subsidiary have been invited to participate, said the people, who asked not to be named because the process is private. The final terms and lenders may be decided next week, according to two of the people.

The size of the loan for the former TXU Corp., which has fluctuated over the past few weeks, is now likely to be about $3.5 billion, said two of the people. Debtor-in-possession financing is funding arranged by a company going through the Chapter 11 bankruptcy process, which typically has priority over existing debt, equity and other claims. Such a large DIP may help reassure vendors, customers and regulators the company can meet its obligations….

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Even as it wrestles with the $18 billion of debt that has overwhelmed it, Detroit has already been billed more than $19.1 million by firms hired to sort through that debt, search for ways to restructure it, and now guide the city through court. That does not include more costs that the city is expected to bear for the support staff for its state-appointed emergency manager, and for another set of lawyers and consultants to represent city retirees.

“It’s just ridiculous,” Edward L. McNeil, an official with the local council of the American Federation of State, County and Municipal Employees, said of the mounting costs. “The only thing that’s getting done is that these people are getting paid big-time while the citizens of Detroit are getting ripped off.”

The uncharted scale of Detroit’s bankruptcy — it is the largest municipal bankruptcy filing in the nation’s history in terms of both the city’s population and its debt — suggests that it may also become the costliest, experts say. City officials offer no estimate for a final tab, but some bankruptcy experts say the collapse could ultimately cost Detroit taxpayers as much as $100 million. As of last week, 15 firms had contracts with the city that could total as much as $60.6 million, city records show.

Some lawyers and other consultants are accepting discounted fees, and a fee examiner has been appointed to ensure that bills stay within reason. Still, the soaring costs are a jolt to retirees and creditors bracing for cuts to payments they once expected.

Some lawyers from the firm Jones Day, which charged the city $3.6 million for four months of work this year, bill for as much as $1,000 an hour, documents filed with the city show. The firm also forgave the city more than $1.2 million in additional costs during the same period, and accepted fee caps as part of its contract, the records show, resulting in effective hourly rates that are lower.

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What do you call the man who is trying to sabotage Chrysler’s initial public offering by threatening to harm the company, perhaps fatally, if the offering is completed?

You call him Chrysler’s chief executive.

There has never been a proposed I.P.O. like Chrysler’s.

How is it different?

First, the preliminary prospectus filed by the company this week has only one underwriter listed, JPMorgan Chase. A typical offering by a large company will have at least a few underwriters. Every investment bank wants some of the profits, and the company wants maximum distribution. When General Motors, out of bankruptcy and newly profitable, went public in 2010, 10 underwriters were listed on the first prospectus, including all the big ones. Many more were added before the offering took place.

Here, it is quite likely that the rest of Wall Street stayed away because they feared alienating the very company whose stock was being sold.

Second, the G.M. prospectus, as with every other I.P.O. prospectus I have ever seen, tried to put its best foot forward. Within the bounds of securities laws, the prospectus writers did their best to attract investors. Chrysler’s, within the same bounds, is clearly aimed at alienating investors….

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JPMorgan Chase & Co. (JPM), the lender that lost almost $2 billion during Chrysler Group LLC’s 2009 bankruptcy, is now its chief adviser as the automaker’s two owners haggle over its value.

JPMorgan will advise Chrysler in the event of its sale to majority shareholder, Fiat SpA, said people with knowledge of the matter who asked not to be identified because the information is private. The bank was also listed this week as the lead underwriter of an initial public offering of Chrysler shares owned by the company’s other shareholder, a United Auto Workers retiree trust.

The dual role highlights the complicated path Chrysler has been forced to take to resolve a dispute between its two backers. Sergio Marchionne, the chief executive officer of both Chrysler and Fiat who has spent four years seeking to merge the companies, is at loggerheads with the UAW’s trust over the value of its 41.5 percent stake in Chrysler. Letting public investors put a price on the stake, through the IPO process, is one way to resolve the matter…..

Read the rest of the article at Bloomberg.

Judge Sean H. Lane of the United States Bankruptcy Court in Manhattan confirmed American’s proposal to exit restructuring proceedings nearly two years after the carrier filed for bankruptcy. As part of the plan, American agreed this year to merge with US Airways, a move that received the backing of creditors as well as its three main labor groups.

But the merger was challenged by antitrust regulators who filed a lawsuit in August to block it on the grounds that it would harm competition and passengers. The airlines have vowed to fight the challenge and a trial is scheduled for November before a separate federal court in Washington.

Thursday’s ruling was supposed to cap a two-year process after American sought court protection to reorganize its business, cut costs and rewrite labor agreements in November 2011. It had initially vowed to emerge as an independent airline, but eventually succumbed to the efforts by US Airways to merge.

Updated, 9:02 p.m. | Both carriers have argued that they needed to combine their networks to be able to better compete with Delta Air Lines and United Airlines, both bigger carriers that completed mergers of their own in recent years.

The elaborate plan was thrown off in August when the Justice Department’s antitrust regulators unexpectedly challenged the merger. It was the first time that regulators had sought to block an airline merger since 2001….

Read the rest of the article at the NY Times.