Detroit thread. Post Kwame, Monica, and $1 houses here.

[Savonarola]

Not so fast:

Lansing— Ruling the governor and Detroit's emergency manager violated the state constitution, an Ingham County Circuit judge ordered Friday that Detroit's federal bankruptcy filing be withdrawn.

"It's absolutely needed," said Judge Rosemary Aquilina, observing she hopes Gov. Rick Snyder "reads certain sections of the (Michigan) constitution and reconsiders his actions."

The judge said state law guards against retirement benefits being "diminished," but there will be no such protection in federal bankruptcy court.

State-level legal skirmishing over the Chapter 9 bankruptcy effort by Snyder and Detroit Emergency Manager Kevyn Orr now will quickly move to the Michigan Court of Appeals.

Attorney General Bill Schuette, on behalf of Snyder, filed an application for Appeals Court consideration of Aquilina's order an hour after it was issued.

Schuette asked the Appeals Court to put a hold on present and future lower-court proceedings and was planning to seek emergency consideration to expedite the process, said spokeswoman Joy Yearout.

Meanwhile, U.S. Rep. John Conyers Jr., D-Detroit, said Friday that Aquilina's ruling justifies the need for congressional hearings on whether Detroit is misusing the bankruptcy process to slash retiree pensions and health insurance coverage.

While experts say federal proceedings take precedence, state-level legal maneuvering could delay the process. Pension board attorneys said their pleadings could wind up in federal court, too.

Snyder authorized Thursday's bankruptcy filing in U.S. District Court in Detroit by Orr and his legal team. That was to set in motion a process in which the court determines whether Detroit qualifies for bankruptcy.

The filing involved a bit of courtroom drama.

With rumors it was imminent Thursday afternoon, attorneys representing the pension boards hurried into Aquilina's court in Lansing to ask for a temporary restraining order.

But Snyder and Orr beat them by a few minutes. Aquilina, informed by phone, allowed the pension board lawyers to revise their restraining order request, then granted it.

Prior to her ruling on Friday, the judge criticized the Snyder administration and Schuette's office over their hasty move.

"It's cheating, sir, and it's cheating good people who work," the judge told assistant state Attorney General Brian Devlin. "It's also not honoring the (United States) president, who took (Detroit's auto companies) out of bankruptcy."

Southfield attorney John Canzano, representing several pension plan members, said bankruptcies of cities such as Stockton, Calif., have been handled in a way that didn't compromise pensions.



From The Detroit News: http://www.detroitnews.com/article/20130719/METRO01/307190099#ixzz2Zb5Qt1m5

Not honoring the president?    Is that a requirement now in bankruptcy court? 

[Admiral Yi]

So it looks like the Michigan law will have no bearing because the bankruptcy is being handled in federal court.

Nice of the judge to demonstrate her sparkling impartiality.

[ulmont]

Yi, in not convinced that is necessarily the case.  The bankruptcy is federal, sure...but the state is a creature of laws and constitution and can (should, anyway) only act accordingly.  So a state judge telling the state that it's not applying its laws might have some bearing on what the state does...

[Admiral Yi]

Yi, in not convinced that is necessarily the case.  The bankruptcy is federal, sure...but the state is a creature of laws and constitution and can (should, anyway) only act accordingly.  So a state judge telling the state that it's not applying its laws might have some bearing on what the state does...

But the decision about how to treat the various creditors is not up to the state of Michigan, it's up to a federal judge.  Unless somehow a Michigan judge finds that the state cannot take the city into bankruptcy court.

[ulmont]

Pretty sure that's what the state judge just said?

[Admiral Yi]

Little ambiguous.  Looks to me like she just granted a stay.

[Savonarola]

My take is that she was just showboating, and it will be overturned on appeal.  In Michigan, state judges are elected.  While they're theoretically non-partisan; in practice candidates are nominated by the parties.  The unions are the dominant power in the state Democrat Party, and this was her announcement that she's running for State Supreme Court.

[The Brain]

Couldn't she just say so? "I'm running for State Supreme Court". There.

Why don't they do what they say? Say what they mean? One thing leads to another.

[Scipio]

Awesome analysis by Melissa Harris-Perry, who clearly, despite her PhD in Poli Sci from Duke, has never heard of Mayor Kilpatrick:

http://youngcons.com/msnbc-political-analyst-detroit-is-what-happens-when-government-is-too-small/

I'ma go outtona limb here, and say that corruption and racism in Detroit were related to the sprawling size of government.

[Savonarola]

First Detroit bankruptcy hearing set for Wednesday
Chad Livengood and Gary Heinlein
Detroit News Lansing Bureau

Lansing — U.S. Bankruptcy Court Judge Steven Rhodes has set the first hearing in Detroit's bankruptcy proceedings for Wednesday to sort out a legal dispute between the city and its pension funds.

In an order filed late Monday morning, Rhodes said his court has jurisdiction on whether to halt a state court lawsuit challenging the legality of Detroit's Thursday bankruptcy filing.

Rhodes, who was appointed to handle Detroit's bankruptcy on Friday, set a hearing for 10 a.m. Wednesday.

He set a second hearing for Aug. 2 to consider a series of other motions in the case, including the city's request for a 32-day deadline for creditors to file objections to the city's eligibility for Chapter 9 bankruptcy protection.

Earlier Monday, Ingham County Circuit Court Judge Rosemarie Aquilina adjourned a hearing until July 29 over whether Detroit's bankruptcy filing violated the state constitution and reiterated the case should remain a state issue.

Aquilina is to hear from lawyers for Gov. Rick Snyder, who petitioned the court on Monday to move the lawsuit to federal bankruptcy court and Rhodes rule on the matter.

The judge has said that state constitution guards against retirement benefits being "diminished," but there will be no such protection in federal bankruptcy court.

"I don't think the constitution should be made of Swiss cheese," Aquilina said Monday. "Once we erode it with one hole, there will be others."

She ordered lawyers for the state and Detroit's General Retirement System and Police and Fire Retirement System to file a litany of briefs this week in preparation of Monday's hearing.

"They're doing everything in their power to take this out of the state of Michigan and put it into federal court," Ronald King, an attorney for Detroit's two pension funds, said of the governor's office.

Meanwhile, lawyers for the Detroit Institute of Arts asked the bankruptcy court Monday to consider the art museum a "party-in-interest" and be notified of all filings in the case as state-level legal skirmishing over the Chapter 9 bankruptcy effort by Snyder and Emergency Manager Kevyn Orr is also quickly moving to the Michigan Court of Appeals.

Creditors may have an eye on the world-renowned DIA collection, listed as a city asset in a bankruptcy filing. But Orr, who also listed the city's share of the Detroit-Windsor Tunnel and Belle Isle as assets, said no sales have been proposed.

On Friday, Aquilina ruled Snyder and Orr violated the state constitution and ordered that Detroit's federal bankruptcy filing be withdrawn.

Attorney General Bill Schuette, on behalf of Snyder, filed an application for Appeals Court consideration of Aquilina's order an hour after it was issued on Friday. The pension funds have until Wednesday to file an answer to Schuette's appeal, King said.

Schuette asked the Appeals Court to put a hold on present and future lower-court proceedings and was planning to seek emergency consideration to expedite the process.

During the Monday morning hearing, Aquilina declined to halt her previous orders.

"This is a very important issue; I'm not going to stay anything," she said from the bench.

Brian Devlin, an assistant attorney general representing Snyder in the case, declined comment Monday.

U.S. Rep. John Conyers Jr., D-Detroit, has said Aquilina's ruling justifies the need for congressional hearings on whether Detroit is misusing the bankruptcy process to slash retiree pensions and health insurance coverage.

While experts say federal proceedings take precedence, state-level legal maneuvering could delay the process.

Snyder authorized Thursday's bankruptcy filing in U.S. District Court in Detroit by Orr and his legal team. That was to set in motion a process in which the court determines whether Detroit qualifies for bankruptcy.

The filing involved a bit of courtroom drama.

With rumors it was imminent Thursday afternoon, attorneys representing the pension boards hurried into Aquilina's court in Lansing to ask for a temporary restraining order.

But Snyder and Orr beat them by a few minutes. Aquilina allowed the pension board lawyers to revise their restraining order request, then granted it.

Prior to her ruling on Friday, the judge criticized the Snyder administration and Schuette's office over their hasty move.


From The Detroit News: http://www.detroitnews.com/article/20130722/METRO01/307220060#ixzz2ZnsiG12b

Thanks, John, you're being a big help as always.

[MadImmortalMan]

I guess I hadn't realized Conyers was still in office. 

[Caliga]

Yeah, as a long-time Detroit politician, I'd asssumed he was in jail by now.

[derspiess]

Awesome analysis by Melissa Harris-Perry, who clearly, despite her PhD in Poli Sci from Duke, has never heard of Mayor Kilpatrick:

http://youngcons.com/msnbc-political-analyst-detroit-is-what-happens-when-government-is-too-small/

I'ma go outtona limb here, and say that corruption and racism in Detroit were related to the sprawling size of government.

Melitha Harrith Perry is too busy making tampon earrings to worry about details like that.

[Admiral Yi]

How would one go about answering the question the honorable representative from Detroit has suggested holding hearings on?

[Savonarola]

And the UAW checks in from Wonderland:

Michigan residents being lied to by state on bankruptcy, UAW president Bob King says
7:02 PM, July 22, 2013   |   28 Comments

A coalition of labor leaders and elected officials denounced Detroit's bankruptcy this afternoon as both unnecessary and a way for Republican Gov. Rick Snyder to put outsiders in charge of Detroit.

"Bankruptcy's not the solution," Michigan AFSCME Council 25 President Al Garrett said at a downtown press conference. "It has been the plan of this administration because there's been a decision made that the people running Detroit, the people who live in Detroit ought not have a say in the destiny of what the city of Detroit is."

Garrett said Snyder broke his oath to uphold the state constitution by approving a bankruptcy that seeks to cut Detroit active and retired workers' constitutionally protected pension benefits.

Representatives of the United Auto Workers, Detroit City Council members JoAnn Watson and Brenda Jones, Wayne County Executive Robert Ficano and several others joined Garrett for a news conference at the AFSCME Council 25 offices on West Lafayette.

Many of their concerns centered on Emergency Manager Kevyn Orr's proposed cuts to retirees' pensions and health care. They disputed Orr's position that he has tried to negotiate over pension liabilities of up to $3.5 billion.

"I think it's really important for the media to report the hypocrisy and the dishonesty that Kevyn Orr says yesterday they reached out and they bent over backwards, and they've never had one negotiating session with any of the unions," said UAW President Bob King. "That's outrageous. People in Michigan should be outraged they're being lied to every day."

Orr's restructuring team has met with union and pension representatives a handful of times since last month to share information about his restructuring plan, including pension and health care cuts. But labor leaders have said the meetings could not be described as negotiating sessions because Orr and his consultants never specified potential cuts on which talks to reach a compromise could be based.

Garrett said AFSCME's lawyers will consider filing an objection to Detroit's bankruptcy on the basis Orr did not fulfill his requirement to negotiate in good faith with creditors.

An Emergency Financial Manager and the Consent Agreement were also not solutions according to the same people.