Panel of Federal Judges Halts Appeals In Detroit Bankruptcy Case

A panel of federal U.S. judges halted all appeals in  the Detroit Bankruptcy Case on Aug. 1 at the request of a number of interested parties, according to the Detroit Free Press. Lawyers for Detroit, the state of Michigan, as well as state Attorney General Bill Schuette, representation for unions, pensioners and retirees wrote to the court, asking it not to proceed with appeals. These groups worried that an appeal could potentially stand in the way of the “Grand Bargain” to which many of them have agreed.

The three-judge panel entered a brief decision in the court docket, The Detroit News reported. It read, “Based on the submissions of the parties, these cases are stayed.”

The Detroit bankruptcy trial has been scheduled for Aug. 21, according to the news source. U.S. Bankruptcy Judge Steven Rhodes will preside over the case, which is slated to last up to 23 days over the course of five weeks, if necessary.

The Detroit Police Officers Association and the Detroit Fire Fighters Association – two unions that are still working with the city to find an agreement – also signed the letter asking the panel to block appeals, the Detroit Free Press reported. Several of the groups that asked for the halt actually filed appeals themselves against Rhodes’ December ruling that Detroit was eligible for bankruptcy and that bankruptcy law superseded Michigan’s protections of pension benefits. These appeals were filed before retirees voted to accept the “Grand Bargain,” however.

The appeal filed by Syncora, a bond insurer owed hundreds of millions of dollars by the city, will still proceed, the news source explained. Syncora hopes to reverse court rulings that say that revenue from the city’s casino tax is legally a part of Detroit.

The story of Detroit’s fall into bankruptcy goes back a number of years and as a bankruptcy attorney I’ve been covering the city’s bouts with bankruptcy since its inception. Get the full scoop from some of my previous posts:

• Two Important Votes in Detroit
• Objections Raised Over Detroit Bankruptcy Plan
• Detroit Bankruptcy Costs Reached Almost $36 Million In 2013
• Silent Victims In the Detroit Bankruptcy Filing
• Judge Rhodes Taps Experts To Help in Detroit Bankruptcy
• No Pension Cuts For Detroit’s Uniformed Retirees
• Detroit Decries Creditors’ Request To Delay Bankruptcy Plan
• Bond Insurer Creates Setback For Detroit Bankruptcy Plan