From Eclectablog: A federal judge will determine on Wednesday morning if Detroit’s bankruptcy filing is a violation of the state constitution which protects public employee pensions.
“U.S. Bankruptcy Judge Steven Rhodes has declared that his court has the authority to rule on a dispute between the city’s pension funds and the City of Detroit — not the state court in Ingham County.Rhodes, in an order filed today, said he will hold a hearing on Wednesday at 10 a.m. to consider the city of Detroit’s request to put all lawsuits filed before the city filed for bankruptcy on hold.The decision by Rhodes means that the first hearing of Detroit’s bankruptcy case could prove to be a crucial moment in the city’s effort to restructure under court protection.The Police and Fire Retirement System and the General Retirement System and its 20,000 retirees filed a lawsuit in Ingham County court last week that argues that Detroit’s bankruptcy filing must be withdrawn because it violates the Michigan Constitution and state law.If Rhodes rules in Detroit’s favor, it would put an automatic stay in the Ingham County case. “The (bankruptcy) court finds that the court has jurisdiction over this matter,” Rhodes said in his order.”
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