Detroit bankruptcy filing is valid, federal judge rules

Detroit bankruptcy filing is valid, federal judge rules

Credit: AP Photo

In this July 12, 2013, photo an Outsource to Detroit banner from Galaxe.Solutions is seen on a Detroit building. After several weeks of slow-moving talks, only one deal has been reached between the state-appointed emergency manger hired to fix Detroit's finances and the more than 50 creditors, two public pension funds and unions jockeying for a piece of the billions of dollars the city owes them. The pace is frustrating for some, who are balking at the 10 cents on a dollar offered by bankruptcy attorney Kevyn Orr. (AP Photo/Carlos Osorio)

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by Associated Press

Associated Press

Posted on July 24, 2013 at 1:34 PM

DETROIT -- A federal judge has put a stop to lawsuits threatening Detroit’s bankruptcy and declared that he will handle any challenges.

The decision Wednesday after two hours of arguments is a victory for Detroit. A county judge last week said Gov. Rick Snyder ignored the Michigan Constitution and acted illegally in approving the Chapter 9 filing, the largest ever U.S. municipal bankruptcy.

Retirees sued, claiming their pensions are protected by the constitution and are at risk in a bankruptcy.

U.S. Bankruptcy Judge Steven Rhodes suspended any pending lawsuits and barred new ones. He says his court will be the exclusive venue for any legal action regarding the bankruptcy.

 

 

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