Judge Orders Withdrawal of Detroit's Bankruptcy Petition

A Michigan county circuit judge on Friday ordered that the city's federal bankruptcy filing be withdrawn because the governor and emergency manager violated the state's constitution. 

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Michigan Gov. Rick Snyder (l), and Kevyn Orr (r), Detroit's emergency manager (Bill Pugliano/Getty Images)

A Michigan county circuit judge on Friday ordered that Detroit's federal bankruptcy filing be withdrawn because the governor and the city's emergency manager violated the state constitution, according to the Detroit News. The state has appealed the order. 

Ingham County Circuit Judge Rosemary Aquilina urged Gov. Rick Snyder to read certain sections of Michigan's constitution, saying,  "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.

Read more at the Detroit News. 

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