Skip to comments.Judge Rules That Detroit Bankruptcy Filing Is Unconstitutional
Posted on 07/19/2013 2:23:28 PM PDT by SeekAndFind
A Michigan judge ruled today that Detroit filing for chapter 9 bankruptcy on Thursday was unconstitutional. Ingham County Circuit Judge Rosemarie Aquilina said the filing must be withdrawn and that, according to the Detroit Free Press, the governor and city emergency manager “must take no further actions that threaten to diminish the pension benefits of City of Detroit retirees.”
The reduction in those particular benefits is at issue here, due to a portion of the Michigan Constitution that reads [PDF]:
“The accrued financial benefits of each pension plan and retirement system of the state and its political subdivisions shall be a contractual obligation thereof which shall not be diminished or impaired thereby.”
The judge interpreted this passage to declare the bankruptcy filing unconstitutional, though this piece in the Detroit News argues that it may not be that clear-cut.
Meanwhile, Attorney General Bill Schuette is appealing the decision to the Michigan Court of Appeals and requesting the orders stayed for the time being.
Michigan judge rules Detroit bankruptcy violates state constitution
I believe bankruptcy court is a federal jurisdiction, you know, like civil rights violations which we hear about every day lately for Mr. Zimmerman.
I don’t see the standing here for this to be in state court.
So, tell the judge to STFU.
I guess this “judge” expect the city to create money out of thin air.
And she’s gonna tell on us. LOL
She’s gonna get swept aside.
Hey Judge, when the state goes BK, you will lose your income too so make plans now to get a job you are qualified for, try over at Arlington Park in Ill cleaning out horse stables.
Here’s the judge’s reasoning:
The state court judge in Michigans capital of Lansing ordered Orr to withdraw the bankruptcy petition because the state law that allowed Snyder to approve the bankruptcy violated the Michigan Constitution. The governor lacks the power to diminish or impair pension benefits, according to the ruling by Ingham County Circuit Court Judge Rosemarie Aquilina.
Contractual obligations go out of the window in Federal Bankruptcy Court. GM had contractual obligations to bondholders which evaporated 5 years ago in bankruptcy court.
Judges cant change a bankrupt city into a solvent one with a ruling, through legal alchemy. Regardless of legal status, Detroit is still broke, and pensioners can be assured that they will be too.
Actually this is an interesting case on state’s rights.
Can a state through it’s constitution or own laws limit when an individual, corporation or municipality files for federal bankruptcy relief?
My guess is not. I think you are right and the Federal judge will vacate the State judge’s order.
A wise Latina?
Where is the constitutional right against insolvency? Broke is broke. I mean who is protected here by the constitution? The debtors? The creditors? The taxpayers? This judge is just plain high.
You can’t get blood from a stone.
(unless you hit someone on the head with it)
When all is said and done, it would appear that the bankruptcy will proceed but with the pensions kept off-limits, much as a student loan not being dischargable. Naturally, the pensions are at the root of the bankruptcy so it will be a circle jerk of the first order of magnitude.
"It's cheating sir, and it's cheating good people who work," Aquilina told assistant state Attorney General Brian Devlin. "It's also not honoring the [United States] president, who took [Detroit automakers] out of bankruptcy."
Yes, I believe that is part of the point of filing for bankruptcy.
The only thing they could argue is that GM’s shareholders didn’t have a line in the MI Constitution saying their pensions couldn’t be reduced/impaired.
Still I’d like to see how they get blood from stones though. If you’re broke, I don’t know how you pay the pension obligations.
Another “Wise Latina.”
Really? What does it matter what any Judge rules. The fact is the place is a shit hole and has been bankrupt for many years and will never, let me repeat that, NEVER be solvent. Do the bankruptcy and move on.