A U.S. bankruptcy judge upset public employee unions and pension funds protesting against Detroit's bankruptcy petition by suspending all legal charges made in Michigan state courts on Wednesday. The move was made to allow more time for the reconsideration of the city's petition for creditor protection.
Steven Rhodes, a U.S. bankruptcy court judge, halted lawsuits filed by retirees, city workers and pension funds opposed to Detroit city's historic bankruptcy filing. He did the same with suits filed against Detroit's emergency manager, Michigan's governor and treasurer to make sure that all battles concerned with the Chapter 9 bankruptcy petition are done only through his courtroom.
The judge's action will also prelude a bruising and protracted dispute over Detroit's eligibility for the restructuring of over US$18 billion worth of debt and healthcare and pension liabilities as dictated by stipulations of federal bankruptcy law.
"It gives us one venue to settle our disputes. This brings it into one court where it should be," said Detroit Emergency Manager spokemans Bill Nowling. Emergency Manager Kevyn Orr was among the attendees on Wednesday of the oral arguments before Rhodes but did not come back for the judge's ruling during the afternoon.
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