Courtesy of Mish.
On Friday, a Michigan Circuit Judge Rosemarie Aquilina ruled Detroit bankruptcy is unconstitutional.
On Friday, a circuit court judge in Ingham County ruled that Detroit’s federal bankruptcy filing violated a part of Michigan’s constitution that protects union pensions. She ordered it withdrawn, a day after Detroit became the largest U.S. city in history to file for chapter nine bankruptcy.
Judge Rosemary Aquilina also said the filing did not honor President Barack Obama’s work for the city, who she said “took [Detroit’s auto companies] out of bankruptcy.” Aquilina said she would send a copy of her order to Obama.
“It’s cheating, sir, and it’s cheating good people who work,” the judge told assistant Attorney General Brian Devlin. “It’s also not honoring the (United States) president, who took (Detroit’s auto companies) out of bankruptcy.”
The Detroit News reported “attorneys representing the pension boards hurried into Aquilina’s court to ask for a restraining order” on July 18, but Michigan Gov. Rick Snyder (R) and Detroit’s emergency manager Kevin Orr “beat them by a few minutes” in filing for bankruptcy. The filing did not deter lawyers for union pension boards, who can use “court maneuvers to slow down federal bankruptcy proceedings.”
Idiocy
The whole point of bankruptcy court is to resolve debt issues that cannot be paid. It is impossible for Detroit to meet its pension obligations and the only way to resolve the issue is in bankruptcy court.
Common Sense
In a common sense position, Michigan Governor Says Detroit’s Bondholders Part of Bankruptcy
Governor Rick Snyder of Michigan said today that the bondholders of the city of Detroit should expect to be “part of the process” of the largest municipal bankruptcy in U.S. history
“Realistically, if you step back, if you were lending to the city of Detroit in the last few years, didn’t you understand there were major issues and problems?” Snyder, a Republican, said on the CBS’s “Face the Nation” today. “Look at the yields they’re obtaining compared to other bonds. They were getting a premium.”
The plight of city pensioners is “one of the other tragic situations” in the Detroit bankruptcy, Snyder said on CBS. He said that during discussions with creditors, “no one” wanted to represent retirees, so he has asked the federal judge in the case to assemble a group of retirees to speak for them.
Pension Funding
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