Judge halts state lawsuits seeking to block Detroit bankruptcy

CNBC ^ | 7/24/13 | Scott Cohn

[illiac]

A federal bankrutpcy judge ruled Wednesday that federal courts will decide if Detroit is eligible for bankruptcy, staying challenges to the bankruptcy in state court.

Detroit's Emergency Manager Kevyn Orr—a bankruptcy expert appointed by Gov. Rick Snyder earlier this year to oversee Detroit's finances—has said the federal bankruptcy filing is necessary to get the city out from under some $18 billion in liabilities.

But the city's employee unions argued the bankruptcy is an end-run around the state constitution, which protects their pension benefits. The unions backed a series of lawsuits filed in Michigan courts to block the bankruptcy. Last week, Ingham County Circuit Judge Rosemarie Aquilina ruled the bankruptcy filing unconstitutional, but a state appeals court put her ruling on hold, and Orr argued the federal court should make that stay indefinite.

[illiac]

And the beat goes on....

[House Atreides]

Yeah!!!!

[bert]

What matters is the suits got filed.

Lawyers will get paid for the effort

[RobinOfKingston]

But the city's employee unions argued the bankruptcy is an end-run around the state constitution, which protects their pension benefits.

Translates to: "Screw Dee-troit...Ah wants mah money."

[ChildOfThe60s]

In an interview before the hearing, Orr said the majority of the pensions are funded, but there remains a $3.5 billion shortfall—and the city has no way to make it up.

"The money's not there," Orr said.

Duh. That fact is conveniently ommitted in everything I read. There ain't no money. Assuming for the moment that the MI constitution does indeed guarantee these pensions, does it also make provisions for conjuring up the money out of thin air?

Liberals and liberal unions *never* see the NO MONEY fact as having any relevance to their desires. In Freudian terms, these unions are nothing more than a collective Id.

[Buckeye McFrog]

Funny how selective Leftists can be on the subject of States Rights...

[SkyDancer]

So they will show how you can get money out of thin air ... forget everything else that needs money what ever there is of it ...give them IOU’s or warrants like CA did to their teachers ...

[VanDeKoik]

But, but....What about honoring Obama??

[Ingtar]

The Feds (ie our wallets) guarantee the leeches will be paid their pensions.

[Squawk 8888]

MI ping.

[P.O.E.]

Pension bankruptcy is probably the best lesson Detroit teachers could give their students - “Don’t spend money you don’t have!”

[C210N]

The MI constitution of 1963 appears to be written with unions in mind, and provides for pri-planned suicide. Seems to me the state needs to... do a bit of shrugging:

§ 24 Public pension plans and retirement systems, obligation.
Sec. 24. 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.

[edcoil]

“constitution, which protects their pension benefits”

Really, that is what a Constitution does?

[wideawake]

Why aren't all the Confederate apologists here on this thread supporting the unions?

Could there be a more clear cut violation of "state's rights" than a federal bankruptcy court judge nullifying the provisions of the Michigan constitution?

[henkster]

Federal Bankruptcy judges are very territorial about their jurisdiction. They have always construed the Constitution as meaning that the Federal Bankruptcy laws are the exclusive bailiwick of the Federal Judiciary, and they trump state courts. Running afoul of a bankruptcy judge by pushing something in state court contrary to their wishes can be hazardous to a legal career.

[EQAndyBuzz]

Here is a thought. The unions should take the money that is funded for them and split it equally amongst all members.

This way it is fair and equitable.

[Auntie Dem]

In an interview before the hearing, Orr said the majority of the pensions are funded, but there remains a $3.5 billion shortfall—and the city has no way to make it up. "The money's not there," Orr said.

Duh. That fact is conveniently ommitted in everything I read. There ain't no money. Assuming for the moment that the MI constitution does indeed guarantee these pensions, does it also make provisions for conjuring up the money out of thin air? Liberals and liberal unions *never* see the NO MONEY fact as having any relevance to their desires. In Freudian terms, these unions are nothing more than a collective Id.

Most government contracts have a "Non-Funding" clause that says essentially, "If our budget doesn't get funded we don't have to honor this contract and pay for it"

[ontap]

. But the city's employee unions argued the bankruptcy is an end-run around the state constitution, which protects their pension benefits

Idiots still don't grasp the facts.....their unreasonable pensions stolen from defenseless taxpayers are the reason for the bankruptcy.....they can join the thousands of investors and pensioners that got screwed when Obama bailed out the auto companies and gave the money to the unions!!!! How's it feel boys!!!!!

[Mercat]

It’s a question of jurisdiction. Once the BR is filed, there is an automatic stay which means that no state court action can be taken. I knew this would be the order. The BR court however, can take the constitutional issue into consideration.

[xp38]