Major Detroit Bankruptcy Court Hearing Planned For Next Week

By: Shannon Kantner Email
By: Shannon Kantner Email

"I don't think the constitution should be made to be swiss cheese," Judge Rosemarie Aquilina said. "Once we erode it with one hole, there will be others."

Attorneys representing Detroit retirees and Governor Rick Snyder were in Ingham County Circuit Court today for a hearing about Detroit's bankruptcy filing.

Judge Rosemarie Aquilina is clear about where stands on the issue.

"There's been a violation of the constitution," Judge Aquilina said.

The judge, along with the attorneys for Detroit's police and fire and general retirement systems, argue the Chapter 9 filing is illegal, by putting pension benefits on the line.

"There is a constitutional protection in place that guarantees or protects accrued pension benefits, and we have an obligation to at least play that out," Ronald King, the attorney representing Detroit retirees, said.

But where it all plays out could be in question now. Attorneys representing Governor Snyder and Detroit's Emergency Manager filed a notice Monday morning just before the hearing requesting the case be moved to federal court.

"I really don't know why they won't let the state courts resolve this, but it's a Michigan constitutional guarantee and protection, so it should be decided by the Michigan courts," King said.

King said they're not trying to cast any blame, they're just trying to do what they believe is right.

"The governor and the emergency manager have a very very difficult task, and we have people who are going to be very much affected by whatever happens in this bankruptcy proceeding, and however it turns out, it turns out," King said.

King said as long as limitations are put in place to protect pension plans, the bankruptcy filing can proceed. Judge Aquilina has her own concerns though.

"I don't think the constitution should be made to be swiss cheese," Judge Aquilina said. "Once we erode it with one hole, there will be others."

The assistant state Attorney General Brian Devlin representing Gov. Snyder in court had no comment after the hearing. The entire thing lasted less than 15 minutes.

Even though Judge Aquilina supports keeping the cases in state courts, she said she'll review the brief for federal court carefully.

Later in the day Monday, the federal bankruptcy judge in Detroit said he'll hold a hearing on Wednesday. He could decide to stop all lawsuits challenging the bankruptcy filing, including the ones brought on by retirees.

Another hearing is scheduled in Judge Aquilina's court room for July 29.

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