Skip to comments.Detroit raced to file bankruptcy ahead of move to block it
Posted on 07/19/2013 12:14:13 PM PDT by Wally_Kalbacken
(Reuters) - Detroit's historic municipal bankruptcy filing on Thursday came less than 10 minutes before lawyers for the city's pension funds and retirees had rushed to another court to try to block it.
The bare bones bankruptcy petition, which came at 4:06:22 p.m., blindsided everyone in the room, according to two lawyers who were in state court in Lansing, Michigan, at the time. Even the lawyer representing the governor and the judge were caught unaware.
"I think everybody was surprised," said Bill Wertheimer, an attorney for a group of current and retired Detroit city workers who filed a lawsuit early this month to try to block any bankruptcy.
"The attorney general, he claimed to know nothing about it, like he was deaf, dumb and blind," said Wertheimer, who is paid by the United Auto Workers. "The judge was clearly taken aback."
The largest-ever municipal bankruptcy in U.S. history puts at risk the future of retiree pension and health benefits for thousands of city workers.
Although city retirement benefits are enshrined in Michigan's constitution, Kevyn Orr, the city's state-appointed emergency manager, outlined a plan for creditors that would include significant cuts in pension payments.
(Excerpt) Read more at reuters.com ...
One of the great things about bankruptcy is that it cuts like a guillotine, down to the minute and second the case is time stamped on filing.
I will be following this closely, watching to see how the Obama Administration injects itself, and looking for "non-bailout" bailouts accomplished by federal taxpayer subsidization (as in the case of GM and Chrysler.) These folks deserve a hard fall, and there is no reason why taxpayers in OK, AZ or GA or anywhere else should take up the slack.
Sound like some county judge just froze the bankruptcy...or changes to retirement pay.
No, that’s not what happened...once filed in Bankruptcy court...all state court actions are stayed. County Judge has no authority...
Now that this is a reality, who gets paid? Obviously, creditors and bondholders do not. But does the city’s obligation to the retirement funds continue, and will those payments still be made, or is this “account” wiped out along with everything else?
“I think everybody was surprised,” said Bill Wertheimer, an attorney for a group of current and retired Detroit city workers who filed a lawsuit early this month to try to block any bankruptcy.
WOW. I imagine this guy is a college graduate being a lawyer, yet he was surprised by the move of a BANKRUPT City to actually file for bankruptcy. How is that education working out for you fellow?
What difference would it make if there is no money? Does whatever funds Detroit may have go to the pension fund above whatever essential like fire and police? But then, why do they need them?
(1) You're right, but
(2) even had the state court judge issued an injunction before the filing, there is a lot of caselaw saying that a state court cannot enjoin someone from filing bankruptcy, because the right to do so arises under federal law, and the Supremacy Clause therefore bars such injunctions.
So much fun to watch the democrats freak out about this...and the best part—seeing as Detroit has had nothing but Democratic rule for the last 50 years, the pretzel logic it takes Democrats to blame republicans (or evil white people for leaving the paradise of Detroit and taking their tax dollars with them)is hilarious.
The little things in life...
Don't send your kids to law skool dis is da pretzel lahgig day learn as day skrambel dare brhains...
Question: Even if the pension funds had managed to file first, would her order have been valid?
See some of the post here that seem to say no, then again the presidents set in the bankruptcy of GM are horrid, anything now goes....
From a couple of the stories I read, the state judge could be in legal difficulties due to her judgement today. One story claimed that she could be arrested and jailed for what she did today. Apparently, no one can stop the “Federal Bankruptcy Case” except a Federal judge.
We lost one Dem Judge trying to hide assets with a short sale and Snyder had to appoint another Conservative. Could this sin be repeated here?
Just curious. What happens if Detroit can’t declare bankruptcy and can’t pay its bills?
Just keep writing those checks
state court cannot interfere in federal courts..
she ( the union bought and paid for judge )can rule that the streets be paved in gold..
she has no jurisdiction anymore..
now for the REAL reason the pension board filed this motion..
they have refused to open their books to the emergency manager, the state, or anyone else..
now they will be forced to..
watch how many people end up in prison..
or made to disappear by the mob
I’m picturing some sort of Racing Lawyers video game...
Ok, on the refusal part, is that speculation or for do you know so for a fact?
Because someone over on ZeroHedge has noted the potential for Corruption, Theft, and all other forms of malfeasance, and this migh tbe the real game here.
* Someone is already going to Prison in regards to one investigation into the Pensions.
* Their was a big story over 2 years ago how a Crony of Kawames got appointed to the pension board and his investment expertise help dwindel the fund from 8.5 billion down to 6.5 billion.
when i read stories in the newspapers, i scan between the lines, and one of the local papers IMPLIED that orr has not been able to see the books yet...
gotta read between the lines baby
I think you are right on.