Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Detroit's Bankruptcy Eligibility Trial Kicks Off
Author: Joel R. Glucksman
Date: November 5, 2013
Key Contacts
Back
The highly publicized trial that will determine Detroit’s eligibility to file the largest municipal bankruptcy in U.S. history kicked off on Oct. 23, with the expected opposition from creditors and labor unions.
Representatives for the city are urging U.S. Bankruptcy Judge Steven Rhodes to approve the city’s petition to file for protection under Chapter 9 of the bankruptcy law, arguing that this is the only way Detroit can avoid a loss of 65 cents of every tax dollar being allocated to debt and other obligations. Should this occur, the city says it would have insufficient funding to maintain the public services that the city’s 700,000 residents rely upon, The Associated Press reported. If Judge Rhodes agrees with the argument, Detroit would be permitted to attempt to restructure roughly $18 billion in debt through municipal bankruptcy proceedings.
However, the list of creditors and pensioners opposing the city’s eligibility is long, and the labor unions argue that the city had failed to negotiate with the creditors in good faith – a key precondition that must be satisfied before a city or county can seek municipal bankruptcy protection. Sharon Levine, who represents Michigan Council 25 of the American Federation of State, County, and Municipal Employees, said that Detroit officials made unreasonable offers over the summer, rather than taking the time to explore all options, USA Today reported.
“Detroit has a lot of problems,” Levine told reporters. “It was the biggest Chapter 9 that was ever filed. If there are huge problems, perhaps we should have taken a little time to consider them.”
The trial will be closely watched by legal analysts, creditors, pension funds, and officials of financially distressed cities that may be contemplating bankruptcy. The proceedings – if permitted to move forward – will also set a landmark precedent for the treatment of pension obligations during municipal bankruptcies.
- Practices: Corporate Transactions & Business, Bankruptcy & Creditors' Rights
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Failing to Comply With NJ Rent Control Exemption May Prove Costly
What Developers Need to Know About New Jersey’s Rent Control Exemption Law to Ensure Entitlement to Exemption for Newly Constructed Multi-family Housing. A property owner in Jersey City is facing a $400 million federal class action lawsuit alleging that the landlord did not follow the procedural steps required to be eligible for exemption from local […]
Author: Patrick T. Conlon
Crypto Securities Law: When Tokens Become Investment Contracts
The application of traditional federal securities laws to crypto assets continues to evolve. In some cases, the Securities and Exchange Commission (SEC) considers tokens and other digital assets to be securities. This makes them subject to federal securities law, including the Securities Act of 1933 and the Securities Exchange Act of 1934. This classification has […]
Author: Bryce S. Robins
The Due Diligence Process for NY Condominiums and Cooperatives
While the New York City real estate market can be extremely competitive, moving too quickly often backfires. Before purchasing a condominium or cooperative in New York City, it is important to do you homework. Purchasing property in NYC can involve a dizzying number of legal issues. These include condo and co-op rules, rent restrictions, and […]
Author: Jesse M. Dimitro
Smart Contract Legal Issues: Drafting Agreements for Blockchain
Smart contracts feature a unique blend of legal agreement and technical code. This innovation has the potential to reshape how business is conducted. At the same time, smart contract legal issues around enforceability, jurisdiction, identity, and compliance are common. The legal framework for these self-executing agreements is still evolving. What Are Smart Contracts? Smart contracts, […]
Author: Bryce S. Robins
Are Stay Interviews the Key to Retaining Top Talent?
Retaining top talent continues to be one of the greatest challenges facing employers today. Even in an employer’s market, the loss of a key employee can disrupt operations and result in significant costs. While compensation plays a role, long-term retention often depends on workplace culture, communication, and employee engagement. One increasingly popular strategy for improving […]
Author: Angela A. Turiano
Why Secured Transactions Are Important
Secured transactions form the backbone of a wide range of business dealings, including business loans, mortgages, and inventory financing. Because the stakes are often high and relatively minor oversights can have drastic consequences, lenders and borrowers should thoroughly understand how to form an enforceable security agreement that protects their legal rights. What Is a Secured […]
Author: Dan Brecher
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.