Breaking: Judge overrules objections to Detroit bankruptcy
posted at 2:28 pm on July 24, 2013 by Ed Morrissey
Looks like Detroit’s bankruptcy is definitely on:
Judge overrules objections to Detroit's bankruptcy filing; rules federal court has jurisdiction of case – @detroitnews
— Breaking News (@BreakingNews) July 24, 2013
When more news comes, I’ll add it as a link, but this is bad news for the unions, as NBC reports:
JUST IN: In defeat for employee unions, federal judge rules Detroit bankruptcy can proceed
— NBC News (@NBCNews) July 24, 2013
The PEUs had wanted to stop the bankruptcy under the state constitution, which requires municipalities to guarantee pension obligations. Municipal bankruptcies, however, are within federal jurisdiction since the Depression. This means that Detroit can force unions to negotiate on pension terms in a bankruptcy proceeding — still a politically dangerous task, but one that will be necessary to unwind the massive debt load of the city.
Update: The Detroit News has more:
A bankruptcy judge has overruled objections to the city’s bankruptcy filing, freezing several lawsuits filed against Detroit and will allow the bankruptcy case to proceed in federal court.
U.S. District Judge Steven Rhodes also decided Wednesday that an automatic stay triggered by Detroit’s Chapter 9 filing extends to Emergency Manager Kevyn Orr, Gov. Rick Snyder and members of the restructuring team.
The decision comes after city lawyers — during a hearing that lasted almost two hours over the biggest municipal bankruptcy case in U.S. history — argued Wednesday morning that Detroit would be “irreparably harmed” if retirees were able to block its Chapter 9 filing.