Largest Municipal Bankruptcy in History on Hold: Judge Says it’s Illegal (+video)

Photo Credit: Dale G. YoungBy Gary Heinlein. Ruling the governor and Detroit’s emergency manager violated the state constitution, an Ingham County Circuit judge ordered Friday that Detroit’s federal bankruptcy filing be withdrawn.

“It’s absolutely needed,” said Judge Rosemary Aquilina, observing she hopes Gov. Rick Snyder “reads certain sections of the (Michigan) constitution and reconsiders his actions.”

The judge said 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. Read more from this story HERE.


Photo Credit: Fox Confusion in Detroit as judge challenges legality of bankruptcy

By Fox News.The ongoing crisis in Detroit took another — and confusing — turn Friday after an Ingham County judge ruled the city’s historic bankruptcy filing violates the state’s constitution and must be withdrawn.

“I have some very serious concerns because there was this rush to bankruptcy court that didn’t have to occur and shouldn’t have occurred,” Judge Rosemarie Aquilina said Friday in a spate of orders arising from three separate lawsuits.

There was no immediate response from Detroit Emergency Manger Kevyn Orr, who filed the bankruptcy document Thursday, and no indication if city officials planned to take any action in response to Aquilina’s ruling.

Aquilina said Michigan’s constitution prohibits actions that will lessen the pension benefits of public employees, including those in the city of Detroit. She added that Gov. Rick Snyder and Orr overstepped their authority and violated state law by proceeding with the bankruptcy filing because they knew the outcome could affect benefits to thousands of Detroit residents. Read more from this story HERE.