CITY OF NEW ORLEANS REACHES MEDIATED SETTLEMENT WITH METRO SERVICE GROUP
NEW ORLEANS — The City of New Orleans, on Dec. 5, 2022, entered into a proposed settlement agreement with Metro Service Group, Inc., McCormick 101, LLC and the Official Committee of Unsecured Creditors that would result in a global resolution of all issues between Metro Service Group and the City of New Orleans.
The Hon. David R. Jones, United States Bankruptcy Judge for the Southern District of Texas, mediated the session and was instrumental in facilitating a reasonable resolution. All parties committed to proceed in mutual good faith to obtain Bankruptcy Court approval of the settlement terms, which would result in the dismissal of Metro Service Group’s bankruptcy case. All contracts between Metro Service Group and the City of New Orleans have been suspended and will be terminated upon approval of the Bankruptcy Court.
As part of the settlement agreement, the City agrees to pay $3.9 million to the Metro estate, and Metro Service Group will make an asset purchase payment of $2.2 million. In accordance with the settlement agreement, McCormick 101 will receive a payment of $5.8 million, and the Official Committee of Unsecured Creditors will receive a payment of $350,000. No settlement funds will go to Metro Service Group or company insiders.
“Since the fall of 2021, the City has been transparent in its process to solicit and award new collection contracts to replace Metro as one of our service providers for several of our households," said Mayor LaToya Cantrell. "With these legal proceedings now behind us, we are excited to redirect our focus solely on our long-term investment in cleaning up this City holistically and now fully transition to new collection contractors who have already began delivering the long overdue increased level of service and overall quality of life residents deserve. Since the new companies started rolling through neighborhoods on November 7, residents have experienced enhanced services, routine and timely pickups, the return of curbside recycling and the introduction of new vehicles and technology all designed to improve the quality and consistency of service. The City will continue to deliver meaningful results that address our garbage crisis and place the needs of our people first.”
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