Judge sets 1st hearing for Detroit bankruptcy
DETROIT — The federal judge overseeing Detroit's bankruptcy set the first hearing in the case for Wednesday when the city urged him to stop pensioners from filing lawsuits that could gum up plans to restructure billions of dollars in debt.
It will be the first hearing less than a week after Detroit became the largest American city to file for bankruptcy.
Judge Steven Rhodes said on Monday he'll take up just a few issues.
The city wants Rhodes to suspend lawsuits and prevent new ones, especially in state court. In one lawsuit, pensioners have complained that retirement checks could be in jeopardy in violation of the Michigan Constitution.
An Ingham County judge ordered Detroit emergency manager Kevyn Orr and Gov. Rick Snyder to not take any more action in the bankruptcy.
The status of employee pensions is expected to be a key issue in the bankruptcy. Orr has said that pension benefits could be reduced along with other debts as the city returns to sound financial footing.
Lawyers for the city said U.S. Bankruptcy Court is the only appropriate venue for matters related to the case.
It's routine, they said, for all other litigation to be stopped, giving a debtor such as Detroit a “breathing spell” as it works to protect assets and restructure debts.
Employee unions are citing a provision in the Michigan Constitution that says pensions for public employees “shall not be diminished or impaired.”
In her ruling Monday, Ingham County Circuit Judge Rosemarie Aquilina said, “I don't think the constitution should be made to be Swiss cheese. Once we erode it with one hole, there will be others.”
Ron King, an attorney for Detroit's pension funds, said the funds aren't trying to stop the bankruptcy, just limit its reach.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- NYC’s High Line completed, culminating 15-year effort
- White House breach ‘a cry out for help,’ alleged intruder’s ex-wife says
- Legislators urge Secret Service to reassess White House security
- Officials say too many in the 18-64 age range skip flu vaccination
- U.S. confident it’ll have allies for airstrikes against ISIS
- Mentally ill Pa. man might go free in 9/11 scare
- 32 structures destroyed in California’s King wildfire
- Beads in beauty products called toxin
- March around the world seek to put focus on climate change
- Backers seek expansion of Till civil rights death law
- Man seen with UVa student faces driving charge