Judge: Detroit Bankruptcy Can Go Ahead

Lawsuits from unions, retirees put on ice
By Kevin Spak,  Newser Staff
Posted Jul 24, 2013 2:42 PM CDT
Firefighters protest outside the Theodore Levin United States Courthouse, in Detroit, July 24, 2013.   (AP Photo/Paul Sancya)

(Newser) – Detroit's bankruptcy will charge ahead unhindered by lawsuits from retirees, a judge declared today. Federal bankruptcy Judge Steven Rhodes froze a number of lawsuits against the city and cleared the way for the bankruptcy to proceed, the Detroit News reports. Union lawyers asked Rhodes to stop the bankruptcy, on the grounds that it targeted pensions, which Michigan's constitution holds as sacrosanct. Residents "have an absolute right to protect their constitutional rights," an AFL-CIO lawyer said.

But Rhodes agreed with city lawyers, who pointed out that in other Chapter 9 cases, the bankruptcy court resolved the kinds of issues raised by the lawsuits. "This court has jurisdiction over this case, and only this court," a city lawyer said. "Widespread litigation … can only confuse the parties."

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