Millennium Post

Legal wrangling shadows Detroit bankruptcy filing

The tug of war over whether Detroit legally could file for municipal bankruptcy continues this week as the city seeks an initial hearing in US federal court to put on hold challenges to the filing in Michigan court.
Concerned that retirement benefits will be slashed, Detroit retirees, workers and pension funds have been running to state court in Michigan’s capital of Lansing in an effort to derail the biggest chapter 9 municipal bankruptcy in US history. A Michigan state court judge on Monday morning adjourned a hearing in a case brought by city pension plans with no action taken.  
That follows an order issued in one of the other cases on Friday by the same judge, Rosemarie Aquilina of Ingham county circuit court, directing Detroit emergency manager Kevyn Orr to withdraw the bankruptcy petition he filed on Thursday.

In Friday’s order, Aquilina said the state law that allowed Michigan governor Rick Snyder to approve the bankruptcy filing violated the Michigan constitution.
Michigan attorney general Bill Schuette, acting on behalf of Snyder, filed an appeal with the state appeals court, which has not yet taken action on the matter. Orr, meanwhile, filed a motion with federal bankruptcy court judge Steven Rhodes, who was appointed on Friday to oversee the Detroit case, requesting a hearing as soon as Tuesday on his request to put a hold on lawsuits aimed at stopping the city’s Chapter 9 proceedings.
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